As I logged onto my computer the first workday of the new year, I immediately saw the following headline: Every Wall Street Analyst Now Predicts a Wall Street Rally in 2026. The last time I recall such a consensus was in late 2021 when virtually all the big financial institutions were predicting a banner year for 2022. But 2022, as many of you may painfully recall, was a disastrous year for both stock and bond markets. That’s not supposed to happen. So much for forecasts!
This doesn’t suggest the 2026 consensus forecast is wrong. But the 2022 market results are a reminder of how far off projections by “professionals” can be. This also doesn’t mean that I’m pessimistic about the future. The U.S. economy is an amazingly resilient and productive machine, with many things going in our favor. For example, the field of artificial intelligence (AI) is developing at a rapid pace. Implementing AI technology will benefit many industries beyond simply tech companies. We saw this in 2025 with many non-tech companies performing well, no doubt in part to implementing AI tools. In fact, this was true across the globe. As strong as U.S. markets were in 2025, foreign stock markets outperformed the U.S. markets.
At the other end of the spectrum, our economy faces headwinds as well. The tariff program rolled out in April remains unsettled. Currently, the Trump administration has given exemptions from the April tariffs to over 1,000 items. Those exemptions result from disruptions and hardships for U.S. consumers and businesses. The use of targeted tariffs to correct unfair trade practices can be a valuable tool. But history shows that markets generally work best when buyers and sellers act independently with minimal government intervention.
Back to that optimistic consensus forecast. This rosy prediction may cause you to consider increasing your exposure to the stock market. But keep in mind it’s just a forecast and may be well off the mark! Remember 2022!
When driving a car, you focus on your lane down the road a bit rather than what’s immediately in front of you. That’s a good rule for managing your investments as well. Focus on the long term down the road instead of adjusting your course to short term news flashes. This will give you a better chance of a successful investing journey!