As we wrap up 2025, I keep coming back to the same pattern: the market can look “broken” for months… and still finish the year in a decent place. We saw double-digit drawdowns at one point, skepticism everywhere, then a recovery that made the earlier panic feel almost, forgotten.
My base case for 2026 is basically a remix of that. More chop. More red months. More people declaring the cycle is over (again). But still a bullish outcome by year-end—if one key condition holds: large-cap tech and AI-heavy names need to keep delivering earnings growth without a brutal P/E reset. That “no multiple compression” part matters more than most people want to admit.
Here’s the interesting part: if the Fed is cutting and rates are trending down, it’s not just a mega-cap story. Lower rates are oxygen for the “other 490” — the broader stock market that’s been living in the shadow of a handful of giants. That’s where breadth can improve: cyclicals, small/mid, and the boring-but-real economy names that don’t need an AI narrative to justify their existence.
Crypto fits into this same frame. In a cutting cycle, liquidity expectations shift, and risk appetite can return fast. But I’m not assuming a clean “alts to the moon” sequel. Dispersion is real. Bitcoin tends to be the cleanest macro sponge, while alts still have to earn their keep (usage, revenue, survivability).
What I’m doing (process > predictions):
- Keep a core I won’t overtrade (BTC/quality).
- Stay selective elsewhere (no desperation buys).
- Rebalance on extremes, not vibes.
- Keep dry powder for the inevitable ugly weeks.
If 2026 really does “look like this year,” the edge won’t be forecasting the next headline. It’ll be having a plan when the chart looks wrong.
Not financial advice—just my current lens. Where are you leaning for 2026: skepticism, cautious optimism, or full defensive mode?