January 2026 KWP Newsletter
January 2026
“The Tale of Two Lunches: A Market Snapshot for 2026”
Imagine two friends having lunch on January 2, 2026. One orders the same thing they’ve had every year—plain, predictable, a safe favorite. The other chooses something adventurous: bold flavors, unexpected pairings, maybe a hint of spice. That tells you something about today’s market mood: many investors want dependable fundamentals, but a big slice of capital is hungry for innovation. This balancing act sets the stage for 2026.
A Calmer Economic Backdrop
After several years of big swings—inflation spikes, rapid rate hikes, and nonstop headlines—the economy enters 2026 on more stable footing. Most major forecasts expect moderate but positive global growth (Goldman Sachs Research forecasts global GDP growth of about 2.8% in 2026.), with the U.S. continuing to lead many developed economies. The United Nations also projects roughly 2.7% global growth, noting resilience despite tariff pressures and geopolitical risk. Inflation has eased closer to long-term targets, which gives central banks room to step back from their most restrictive policies. That matters, because markets tend to breathe easier when interest rates stop being the main character.
https://www.goldmansachs.com/insights/articles/the-global-economy-forecast-to-post-sturdy-growth-in-2026?utm_source
Stocks: Less About Hype, More About Earnings
Innovation remains a powerful theme. Artificial intelligence, automation, and productivity-driven technology are no longer just exciting ideas—they’re showing up in real business investment and earnings growth. At the same time, leadership is broadening. Healthcare, industrials, and infrastructure-related sectors are benefiting from long-term trends like aging demographics, reshoring, and energy investment.
That’s healthy. Markets work best when gains aren’t coming from just a handful of names, but from a wider group of companies doing real, profitable work.
Bonds Are Doing Their Job Again
One quiet but important shift heading into 2026 is the return of income. With inflation cooling and rates stabilizing, bonds are once again providing yield and balance, not just frustration. For diversified portfolios, this brings back a familiar dynamic: stocks for growth, bonds for stability, and cash for flexibility. It may not sound exciting—but boring can be beautiful when it supports long-term goals. https://www.morganstanley.com/insights/articles/global-economic-outlook-2026?utm_source
What Could Get in the Way?
Of course, no year arrives without its share of unknowns. Geopolitics, election cycles, trade policy, and unexpected economic slowdowns can always rattle confidence in the short term. Markets may still wobble—but wobbling is not the same thing as breaking.
History consistently shows that disciplined investors who stay invested, rebalance when needed, and avoid emotional decisions tend to be rewarded over time. As always, the goal isn’t to predict every twist and turn—it’s to stay aligned with your plan, your priorities, and the bigger picture. That’s how confidence compounds over time.
As a friendly reminder, there is still time to make retirement account contributions for the 2025 tax year, up to April 15, 2026. Please reach out to office for further details. See below for updated 2026 contribution and phaseout limits.
https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500?utm_source