6 Stock Market Predictions For 2026, #286
As we turn the calendar to 2026, I reveal my forecasts for the stock market, interest rates, and top asset classes, and take a look back at how my 2025 predictions stacked up against reality.
From the S&P 500’s rollercoaster performance to the ongoing rivalry between growth and value stocks, and even a showdown between bitcoin and gold, I break down what the numbers were, where I hit the mark, and where I missed. You’ll also hear my insights on international versus U.S. stocks, the outlook for small caps, and what the Federal Reserve might do with interest rates in the year ahead.
Get ready for smart strategies, listener thank-yous, and a dose of investing reality as I help you set expectations (and goals) for the year to come.
You will want to hear this episode if you are interested in...
00:00 Happy New Year!
04:34 S&P 500 Trends and Predictions.
07:49 Market Trends & 2025 Predictions.
08:54 Bitcoin vs Gold & Stock Returns.
11:17 Importance of diversifying with international stocks.
14:20 Investment Predictions for 2026.
17:36 Stay invested to make the best financial gains.
How did my 2025 market predictions fare?
2025 turned out to be another rollercoaster, with both triumphs and challenges for investors. Beginning with an impressive performance, the S&P 500 flirted with a 20% annual return, after two previously remarkable years (+25% in 2023 and +23% in 2024). Volatility struck early in April due to concerns about tariffs and political tensions, leading the index to drop as much as 18% year-to-date before rebounding sharply.
The market often experiences significant intra-year declines, on average, 14-15% since the 1970s, so these swings are more common than many investors realize. Despite underestimating the final S&P 500 return in my 2025 prediction, it’s important to stick with your plan through turbulence.
Growth vs. Value
One of the perennial debates in investing is whether growth stocks (think Apple, Nvidia, and Microsoft) or value stocks (like JPMorgan, Walmart, and Berkshire Hathaway) will come out on top. While value historically outperformed over the long term, the last decade and a half has belonged to growth. I predicted value would outperform in 2025, but growth eked out the win yet again, maintaining its streak. The ETF comparison, Vanguard’s VONG for growth and VONV for value, shows just how close the race was, with both categories putting up strong numbers.
Large vs. Small Caps: The Size Dilemma
Size matters in investing, particularly when it comes to large-cap (S&P 500) versus small-cap (Russell 2000) stocks. I expected small caps to shine in 2025, but large caps led for the fifth consecutive year. The good news is that small caps narrowed the gap, hinting that a turnaround could be on the horizon as economic and regulatory shifts potentially favor these underdogs.
Bitcoin vs. Gold
For those seeking diversification, Bitcoin and gold are often top contenders. After years of jaw-dropping surges and gut-wrenching drops for Bitcoin, 2025 saw gold steal the spotlight with a phenomenal gain, its best showing since the 1970s, while Bitcoin stumbled. Still, I believe Bitcoin’s day in the sun isn’t over and predict it will bounce back in 2026.
U.S. vs. International
Global diversification hasn’t paid off for U.S. investors in recent years, as U.S. stocks consistently outpaced their international counterparts. In 2025, the tides turned and international stocks delivered their strongest performance in 15 years, besting the S&P 500’s return. It’s a timely reminder not to ignore the opportunities abroad, even if I feel U.S. equities still have the edge for 2026 due to ongoing innovation and growth potential.
Interest Rates and Federal Reserve
Few factors move markets like interest rate decisions. Predicting three cuts and a year-end rate of 3.5–3.75%, I called it accurately for 2025. Looking to 2026, I expect another two cuts, with possible changes in leadership at the Fed adding an extra dose of uncertainty.
Key Takeaways for 2026
So, what’s the game plan for the coming year? I predict a tempered 8.5% return for the S&P 500, a possible value and small-cap renaissance, Bitcoin’s comeback, U.S. stocks leading, and a cautious but optimistic approach to interest rates. But the most valuable advice is to stay invested. Market timing is notoriously difficult, and missing just a few of the market’s best days can devastate long-term returns. For those investing for a comfortable retirement, discipline and diversification remain your best allies.
Resources Mentioned
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