Investing in 2026, Opportunities & Risks Part 1 of 2

Key Concepts

• Bull Market: A period of sustained increase in market prices. The current bull market began in October 2022.
• Quantitative Tightening (QT): A contractionary monetary policy where a central bank reduces the money supply by decreasing its holdings of bonds.
• Federal Funds Rate: The target rate that the Federal Reserve sets for commercial banks to charge one another for the overnight lending of reserves.
• GDP (Gross Domestic Product): The total monetary or market value of all final goods and services produced within a country’s borders in a specific time period.
• Yield Curve: A line that plots the interest rates (yields) of bonds having equal credit quality but differing maturity dates. An inverted yield curve is often seen as a recession indicator.
• Magnificent Seven: Refers to the seven largest US technology companies (Microsoft, Apple, Nvidia, Amazon, Alphabet (Google), Meta (Facebook), and Tesla).
• EMA (Exponential Moving Average): A type of moving average that gives more weight to recent prices.
• Dollar-Cost Averaging: An investment strategy where a fixed amount of money is invested at regular intervals, regardless of the asset's price.

US Market Outlook for 2026: A Year-End Review & Forecast

The speaker begins by noting the continued strong performance of US markets, marking three consecutive years (2023, 2024, and 2025) of double-digit gains. As of December 27th, 2025, the S&P 500 is up 17% year-to-date. He criticizes the prevalence of negative market predictions from mainstream financial news, highlighting their consistent inaccuracy, particularly regarding the anticipated recession that failed to materialize in 2024 and 2025. He references specific instances of pessimistic forecasts, including warnings of a stock market crash in 2025 (repeated annually for the past decade) and recession predictions following the April tariff-related market dip. Examples cited include commentary from HSBC (“Classic bear market rally”), Jefferies (S&P 500 target cut), and Wall Street trading desks predicting a worsening selloff.

Personal Portfolio Performance & Student Success

The speaker shares his personal portfolio’s performance, currently up 18.74% year-to-date, slightly outperforming the S&P 500. However, he emphasizes the significantly greater success of his students, citing individual returns of 31% (Raj), 127% (Rustam), 28% (Ary), and 208% (Brian), among others. He attributes his comparatively conservative approach as a potential reason for this disparity and plans to analyze his performance in a future “year in review” video. He acknowledges that even a modest outperformance is satisfactory.

2026 Market Outlook: Bullish vs. Bearish Arguments

The core of the video focuses on forecasting potential market performance in 2026. The speaker stresses the inherent unpredictability of market forecasting, stating that all predictions are “purely for entertainment” and do not influence his investment decisions. He maintains that he will continue to invest in undervalued companies and pursue both bullish and bearish trades regardless of his overall outlook.

Historical Market Trends: He presents historical data indicating a 78% probability of positive market returns in any given year, based on the last 74 years (1951-2024). Specifically, 58 out of 74 years ended with gains, while 16 years experienced losses.

Reasons to be Bullish (Six Main Points)

1. Strong US Economy: Despite repeated recession predictions, the US economy remains robust. Q3 2025 GDP growth came in at 4.3%, the strongest quarterly growth in two years, driven primarily by consumer spending (up 3.5%). The Federal Reserve projects 2.3% growth for 2026, with some investment banks forecasting 3%. This growth is supported by the lagged effects of interest rate cuts and ongoing fiscal stimulus from the Trump administration.
2. Federal Reserve Rate Cuts & Quantitative Tightening End: The Federal Reserve is in a rate-cutting cycle, having lowered the Fed Funds Rate to a target range of 3.5-3.75%. The end of Quantitative Tightening (QT) increases the money supply, historically a positive indicator for stocks and risk assets.
3. S&P 500 Earnings Growth: S&P 500 companies are expected to experience 15% earnings growth in 2026, building on double-digit growth in 2025. This growth is largely attributed to productivity increases driven by AI adoption.
4. Deregulation & Tax Cuts: The Trump administration’s policies, including deregulation and corporate tax cuts, are projected to inject $137 billion into corporate profits and $100 billion into consumer pockets, stimulating economic activity.
5. Yield Curve & Treasury Yields: The yield curve has inverted and is now sloping upwards, with the 10-year Treasury yield currently around 4.2%. This falls within the “sweet spot” of 3.5-5.5% historically associated with high PE ratios.
6. Uptrend & Bull Market Stage: The market is currently in an uptrend, supported by positive moving average crossovers (20 EMA above 40 EMA, 50 MA above 150 MA, upward sloping 200-day MA) and higher highs/higher lows in price action. 2026 will be the fourth year of the bull market that began in October 2022, and historically, the fourth year of a bull market has an 85.7% chance of being positive.

Technical Analysis & Trading Strategy

The speaker emphasizes the importance of observing market trends through moving averages and price action. He suggests waiting for a “wave down” before buying, utilizing a dollar-cost averaging strategy to capitalize on potential dips.

Conclusion & Disclaimer

The speaker concludes by reiterating the inherent uncertainty of market predictions and emphasizing that his forecasts do not dictate his investment strategy. He encourages viewers to subscribe for Part Two of the video, which will explore the bearish arguments for 2026, and to explore his online courses and Wealth Academy program for further investment education. He ends with his signature sign-off: “May the markets be with you.”