As we look ahead to 2026, investors are coming off several years defined by inflation shocks, rapid interest-rate changes, and unusually narrow market leadership. Innovation, particularly artificial intelligence, has played a central role in market returns. But as enthusiasm builds, so do legitimate questions about sustainability, valuations, and risk.
With that context, here are five items on my 2026 wish list. These are not predictions, but conditions that could support healthier markets and better long-term outcomes for investors.
1. Growth Beyond Technology
Recent U.S. stock market performance has leaned heavily on a narrow group of large-cap technology and AI-driven companies. While innovation remains vital, no economy—or market—thrives when growth depends on a single engine. My wish for 2026 is broader economic and earnings participation across sectors such as industrials, healthcare, financials, energy, infrastructure, and small- and mid-sized businesses. Broader growth would strengthen job creation, support consumer demand, and help cushion markets if technology leadership falters.
2. A Reality Check on AI
Artificial intelligence holds enormous long-term promise, but markets often struggle to price transformational technologies in real time. Massive spending on data centers, chips, and infrastructure has raised concerns about overinvestment, stretched valuations, and future returns on capital. My wish is not for AI to fail—but for expectations to reset to more realistic levels. If growth broadens beyond technology, markets may be better insulated from disruptions should AI enthusiasm cool or capital spending slow.
3. A Softer, More Predictable Interest-Rate Environment
Interest rates remain a powerful force shaping valuations and investor behavior. While higher rates helped rein in inflation, sharp swings create uncertainty for businesses and consumers. A more stable and predictable rate environment would allow capital to be allocated more efficiently, support housing and credit markets, and restore balance between stocks and bonds. Markets don’t need dramatically lower rates, just clearer footing.
4. Inflation That Stays in Check
Interest rates and inflation are closely linked, and investors benefit when both behave. Persistent inflation erodes purchasing power and complicates retirement planning, while deflation can signal economic weakness. My wish for 2026 is continued progress toward stable, manageable inflation—enough to support wage growth without forcing policymakers into reactive decisions. Price stability remains a cornerstone of sustainable economic growth.
5. Renewed Respect for Diversification
Finally, I hope 2026 brings renewed respect for diversification. Concentrated leadership, whether in technology or any other area—can tempt investors to abandon disciplined portfolio design. Diversification isn’t about predicting the next winner; it’s about managing risk, smoothing volatility, and staying invested through market cycles. When leadership shifts, diversified portfolios are better positioned to adapt without dramatic changes.
Final Thoughts
Markets rarely deliver ideal conditions all at once. But long-term success doesn’t require perfection—only patience, discipline, and perspective. If growth broadens, AI expectations normalize, and economic stability improves in 2026, investors who remain diversified and focused on long-term goals will be well positioned—regardless of headlines.
At Bloom Advisors, that disciplined approach remains at the core of how we guide clients through every market environment.
