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1. Government stimulus to support growth: the US should focus on tax cuts and deregulation efforts ahead of the November 2026 mid-term elections. Europe will spend on infrastructure and defence, while China and Japan will also add targeted measures to support domestic consumption and the property market.
2. Moderating inflation to allow lower US rates: steady US inflation and low/falling inflation in Europe and Asia should allow for lower interest rates in the US and emerging markets. Long-term yields should remain around current levels, with IG credit potentially benefiting from tighter credit spreads. Favour Euro IG credit including financials, EM sovereign bonds in local currency
3. Ongoing bull market in stocks. Ample liquidity, lower rates, earnings growth, deregulation and buoyant buybacks support global stock markets. Prefer World ex-US (Japan, emerging markets), health care, Euro banks and mining sectors.
4. Precious and strategic metals: long-term positive on precious metals given expected weaker US dollar, lower rates and persistent geopolitical volatility. Copper to benefit from strong global AI/electrification demand with supply limited. Favour exposure to physical copper, global mining stocks.
5. Six investment themes for 2026: i) Ride the bull but guard the gains; ii) Escape shrinking cash returns; iii) Beyond algorithms, the new AI frontiers; iv) Welcome to the new age of scarcity; v) Investing when policy rules markets; vi) Opportunity Rising: the allure of Asia.
What Will Really Matter in 2026 ?
As global financial news continues to evolve at unprecedented speed, the coming year demands a more rigorous and forward-looking framework for decision-making. For global wealth management professionals and seasoned investors alike, 2026 will be defined by a delicate interplay between moderating inflation, policy-driven growth, and profound technological disruption.
Against this backdrop, understanding the most decisive investment strategies becomes critical. The sharp turn in monetary policy, the resurgence of government intervention, and the accelerating capex cycle related to artificial intelligence are not isolated phenomena but structural forces reshaping long-term asset allocation. In short, 2026 presents a calibrated inflection point, rich in opportunity yet sensitive to valuation, liquidity, and geopolitical complexities.
1. 2026 Top Convictions
A Transforming Interest Rate Landscape
Global disinflation, particularly outside the United States, sets the stage for gradually declining policy rates across most developed markets. Long-term yields should remain well anchored, a constructive backdrop for both fixed income and selective risk-taking.
Fiscal Stimulus as a Core Growth Driver
The US pivots from tariff-centric policy to tax cuts and deregulation ahead of the November mid-term elections. Europe leans heavily on infrastructure and defence spending, while China and Japan deploy targeted measures to support domestic demand and stabilise the property market.
A Continuing but More Selective Equity Bull Cycle
Ample liquidity, resilient earnings, and the ongoing build-out of AI infrastructure support a continued global equity uptrend. However, valuation dispersion calls for surgical allocation. World ex US markets, Eurozone banks, healthcare, and mining stand out.
Commodities and Strategic Metals Regain Centre Stage
Copper, silver, and gold benefit from both structural demand and constrained supply. The investment case extends beyond hedging and increasingly forms part of sophisticated alternative investments strategies.
2. Will 2026 Be Another Profitable Year for Investors?
2025 was a rare year in which nearly all major asset classes generated positive returns. Despite episodes of volatility, financial markets demonstrated remarkable resilience and an ability to absorb geopolitical and economic shocks.
A “Goldilocks” Scenario Emerging
The United States enters 2026 with growth that is neither overheating nor contracting. AI-driven capex continues to fuel economic activity while consumption normalises. In Europe, moderating inflation and declining energy prices may unlock a more robust expansion than initially expected.
Asia presents a compelling picture with targeted fiscal support, stabilising exports, and rising disposable income reinforcing the region’s medium-term appeal.
Diverging Inflation Regimes
US inflation remains anchored near 3 percent due to tariffs, energy pressures, and sticky services pricing. Meanwhile, the Eurozone continues its disinflationary trajectory, China remains in mild deflation, and Japan experiences steady, moderate price increases.
Reinforcing the Fixed Income Equation
Short-term yields are pinned down by dovish rate trajectories. The 10-year US Treasury is expected to hover near 4.25 percent, while the Bund aligns around 2.75 percent, suggesting stable return profiles for sovereign bonds.oday’s low yields.
3. Economic Outlook and Interest Rates
Regional divergences will matter more than ever.
● United States: monetary easing meets political pressure as housing activity rebounds with declining mortgage rates.
● Europe: lower imported inflation and strategic public spending provide a foundation for cyclical reacceleration.
● Asia: China faces muted consumption while Japan benefits from rising wages and employment.
● Yield curves: modest shaping reinforces a neutral stance on sovereigns.
4. Corporate Credit and Real Estate: Tighter Spreads Ahead
US Corporate Credit: A Dichotomy
Investment-grade credit benefitted from falling Treasury yields, yet hyperscalers’ aggressive debt issuance introduces a fragility premium. Credit spreads reflect investor unease over deteriorating free cash flows in the technology sector.
Europe and the UK: A More Convincing Story
Unlike the US, Eurozone IG spreads compressed through 2025, creating greater potential for valuations to improve further in 2026. Both regions warrant a constructive stance.
Real Estate: A Slow but Defined Recovery
With stable long-term rates, rising rental demand and moderate price appreciation, European real estate is positioned to deliver attractive five-year total returns. This makes it a complementary pillar in well-structured alternative investments frameworks.
5. Equities: The Great Build-Out
Global Backdrop: Selective Optimism
Equities remain supported by favourable financing conditions and transformative capex cycles.
United States
With valuations elevated, earnings growth becomes the critical variable. AI infrastructure, semiconductors and cloud services remain at the epicentre of opportunity.
Europe
Earnings revisions improve as energy costs fall. Domestic sectors such as industrials, infrastructure and renewables are primed for resilience.
Emerging Markets
Lower rates, a softer dollar and technological progress place emerging Asia at the forefront, with Chinese tech offering attractive value relative to US peers.
Japan
Governance reforms, robotics leadership and deepened US economic ties reinforce its status as a strategic overweight.
6. Currencies and Commodities: A Weaker Dollar Cycle
A softening US labour market increases the likelihood of additional Fed cuts, supporting further USD depreciation. Dedollarisation, already visible in the decline of USD reserves from 60 percent to just above 40 percent, adds structural pressure.
On commodities, the long-term bull case is intact. Gold and silver benefit from geopolitical uncertainty, while copper and strategic metals capture the full force of electrification and defence-driven demand.lic and private markets.
7. 2026 Risk Focus: US Private Credit
Rising defaults including high-profile collapses such as Tricolor and First Brands highlight mounting stress within private credit markets. Refinancing challenges for 2021 and 2022 borrowers, heightened downgrade cycles and stressed liquidity conditions suggest that caution is warranted.
Five indicators will be essential to monitor including indexed loans, BDC ETFs, regional bank performance, credit spreads and private credit managers.
8. The Six Investment Themes for 2026
● Ride the bull, but guard the gains with structured solutions and diversification beyond US megacaps.
● Escape shrinking cash returns as EM debt, financials, private credit and dividend equities lead the search for yield.
● Beyond algorithms with AI infrastructure, energy transmission and humanoid robotics acting as transformational opportunities.
● The new age of scarcity where metals, energy and extraction assets gain strategic relevance.
● When policy rules markets as real assets and industrials outperform in policy-driven cycles.
● Opportunity rising in Asia with governance reforms, innovation and domestic liquidity reinforcing the region’s ascent
9. Macro and Market View
This synthesis bridges macroeconomic forces, valuation regimes, geopolitical risks and sectoral momentum, offering a coherent set of investment strategies to guide allocation across regions and asset classes.
10. Main Recommendations
A consolidated view across equities, fixed income, commodities, private assets and currencies provides actionable orientation for sophisticated portfolios.
11. Economic and FX Tables
These projections underpin strategic allocation decisions within modern wealth management, offering clarity on expected growth, inflation and currency paths.
In a landscape shaped by accelerating innovation, structural policy shifts and evolving financial news, disciplined allocation and informed foresight remain indispensable. The year 2026 is not a mere continuation of existing trends. It is an opportunity to reposition with conviction, sophistication and strategic acuity.
Edmund Shing, PhD
Global Chief Investment Officer
