2026 Blue Print
Laying the Foundation
Twenty-twenty-six has officially begun. With that fresh start comes a mix of excitement and anxiety hanging over investors. 2025 was a rollercoaster year, we saw monumental days such as Liberation Day, which pushed markets into a near 20% drawdown, and despite that the market still rallied roughly 16% on the year.
As 2025 fades into the recesses of our minds and 2026 lies ahead, it’s important to step back and create a guide for investing in 2026
Before laying out my blueprint for navigating 2026, it’s essential to understand both 2025 and historical markets to better navigate the future.
A Look Back at 2025
S&P 500: +16%
Dow Jones: +13%
Nasdaq: +20%
2025 marked the third consecutive year of double-digit gains for U.S. equities. Since the start of 2023, the S&P 500 is up roughly 80%, which is well above its historical average.
Four straight years of gains has only happened five times in market history, with the most recent comparable streak ending in 2007.
The S&P 500 currently trades at approximately 22x forward earnings, well above its 10-year average of 19x. In addition, according to Bank of America, roughly half of the commonly tracked valuation metrics are now higher than levels seen during the dot-com era.
Despite these elevated valuations, the general consensus on Wall Street remains bullish. Most major firms expect the S&P 500 to finish 2026 between 7,100 and 7,600.
The New Market
I think it’s important to recognize that the markets we operate in today are not the same markets our parents grew up in. Information no longer disseminates from a morning newspaper or even nightly television broadcasts. Today, information moves through social media and outlets we have in the palms of our hands.
The point is this: investors now absorb information at a much faster rate and respond almost immediately. I recall reading an article that discussed how, because information spreads so quickly, prolonged market “scares” no longer exist.
Instead of months-long downturns, we now see short, fast pullbacks, often lasting a week or two, followed by continued gains.
We witnessed this play out during the Japanese yen carry trade, an event that caused markets to decline by roughly 14%. Yet within the following week, the move was largely ignored and quickly reversed.
The same can be said for Liberation Day.
I would argue that these same events occurring in 1999 would have caused fear and paranoia lasting months before investors regained confidence.
With all that being said, we are brought into 2026.
Markets and investors no longer fall victim to the same forces that plagued prior generations. Governments and central banks are also far better equipped to respond to crises, with faster policy tools and clearer communication than in the past.
I bring this up to highlight an important idea: if and when the market experiences a downturn, it is unlikely to be catastrophic or result in multi-year pullbacks. I believe those types of declines are increasingly a thing of the past.
As we head into 2026, many expect a pullback simply because one “needs” to happen. But if a correction does occur, I don’t believe it will take the form of a year-long bearish trend. Instead, it will likely resemble the micro pullbacks we’ve already seen.
Rates, the Fed, and a Shift in Monetary Leadership
Another factor that cannot be ignored heading into 2026 is monetary policy. To cut to the chase, the Fed has been decreasing interest rates, which will incentivize spending and investing.
In 2026, Jerome Powell’s term as the Fed chair will also end, which will allow Donald Trump to appoint his successor. Love Trump or hate him, there is no secret to his intentions. Trump will appoint a chair who will decrease rates as much as possible to continue to wind up the market.
Although we are unsure of the ramifications of inflation because of this, one thing will be certain: interest rates will remain low, which is generally beneficial to the stock market.
Tech Sector
With that backdrop, we need to look at plays that increase portfolio growth while still allowing for sound investing. As we neared the end of 2025, money flowing into tech began to slow. This showed up in companies such as Meta Platforms and Oracle, both of which saw notable pullbacks.
Investors also appear less excited by the same familiar script centered around NVIDIA. Headlines like “META buys 1,000 NVDA GPUs for $1 billion” no longer carry the same weight they once did in driving markets higher. Personally, I feel uncertain about tech as the primary market driver going forward.
While I still believe tech will continue to grow and remain generally bullish long term, I think 2026 may bring a sector rotation away from tech and toward other areas of the market.
Following the Money
With that in mind, it becomes critical to ride the wave and “follow the money”. Investors should watch for dormant sectors and pay close attention to whether institutional capital is beginning to flow in at increasing rates.
We saw this dynamic clearly in 2020 and 2021, when money flowed out of tech, only to rotate back aggressively starting in 2022. Which is why tech is a dominant force in the market today.
Tools such as ETF.com Fund Flows, StockCharts Relative Rotation Graphs, and FINVIZ sector maps can help conceptualize which sectors are seeing pullbacks and growth.
Where I’m Looking in 2026
Moving into 2026, I believe one of the most attractive opportunities lies in historical growth giants that are currently undervalued. Examples include names like UnitedHealth Group, Netflix, Progressive, and Amazon.
These stocks have seen downturns or underperformed the SPY in recent years, largely because tech-centric investments consumed the markets.
As investors grow more hesitant, I believe money will begin flowing into more trustworthy companies with proven track records, especially those trading at discounts relative to the broader market.
Energy, Utilities, and the Backbone of Growth
Looking forward, I also think energy and utilities are a solid bet heading into 2026. Arguably, the AI, GPU, and tech craze has lost some of the fire it once had, but what’s undeniable is the underlying architecture required to keep it afloat. According to the U.S. Energy Information Administration, the price of electricty across Residential, Commercial, Industrial, and Transportation sectors has consistently risen year over year.
To capitalize on that growth, energy and utilities will remain in high demand. Data centers, AI infrastructure, and cloud computing all require enormous energy. This all translates to profit for companies in this sector.
Crypto
Lastly, I believe Bitcoin remains very attractive at current price levels. Whether the suits in New York want to admit it or not, crypto has become mainstream and is now part of the investing environment.
Nobody can deny the growth BTC and ETH have achieved over the last decade and being able to enter at an attractive time will pay off in the future.
Final Thoughts
Now is also a good time to review the stocks and ETFs currently held in your portfolio. At a minimum, positions should still be trading above or near their 200-day moving average and even above the SPY.
In bullish markets like the one we’re in now, tying up capital in dying stocks can be costly—especially if your goal is growth.
It’s time to harvest and reinvest.
