Next year it is important to pick stocks from sectors removed from the politics of now and focus on businesses that will make money regardless of the whims of the presidency. Don’t get me wrong, should the government end up backing a company or sector of a stock you picked that is very helpful, but you do not want to depend on that to make money.
The sectors that seem to be immune from government policy right now are technology, biotechnology, space, aerospace, telecommunications, and robotics. Regardless of tariffs, K-shaped economy etc. these businesses are performing. A lot of business to business money is going back and forth but with a weak consumer this seems to be the place to be. It is very difficult to get excited about the retail sector right now or anything having to do with disposable income.
Removal of Tariffs
It is likely that the Supreme Court will remove the tariffs that have made many products in America more expensive but that may not stop the Trump administration from digging into other laws that allow them to impose tariffs. That being said even if they get sued for that behavior it would take a while for the Supreme Court to rule on every move the Trump administration takes. Do NOT count on the removal of tariffs to significantly affect the market.
IPOs
The market might see a significant amount of IPOs in 2026 including the possibility of SpaceX. Regardless of what you think of Elon Musk SpaceX is the largest player in the game and will most likely be around for a while. This is an IPO to watch out for and an investment to seriously consider.
Unemployment
The unemployment rate has been ticking up. This is something to worry about because if costs do keep rising and people start getting laid off this will start to slow down the economy and the market will have difficulty going up.
The 2026 Economy
There is a lot happening right now in the economy in America. There has been a lot of investment in Nuclear Power which when implemented will further reduce the need for oil in this country. While the cost of groceries is up 71% year-over-year the price of oil has remained steadily low. This tells me that many investors do not consider oil to be the dominant source of energy as time goes on and I have to agree here.
The problem of food is a serious problem. One of the biggest blocking factors preventing the American economy from really taking off is the price of food. The fact that 58% of Americans are paid hourly or in that percentage range are exposed to fixed incomes and the fact that the government has done NOTHING to fix this problem will be a major impediment to the economy really getting hot.
Conclusion
I think 2026 is going to be a volatile year. Remember the market is a forward looking indicator so if say the government addresses food costs, you could see an upswing, but if they don’t you could see a decline. Businesses however, will never stop trying to be profitable and it is the secular industries I mentioned that should continue their growth stories. So while I do not think the market will be hot next year, I do think there is always money to be made but investors now have to be smart and pick businesses immune to increasing costs and stick with them. The overall market will keep chugging along higher like it normally does but do not expect to rock and roll.