Setting the 2026 Lens: Themes Not Targets

Happy New Year and welcome to The Art of Investing’s 2026 Outlook Special.

Rich McDonald, Mark “Spice” Holden and Chris Fellingham are joined by economist Stu Thompson to cut through the noise and focus on the big themes that could shape markets in 2026. Not next week’s headlines, not bank price targets, but the forces that really matter for long-term investors.

With consensus forecasts pointing to steady growth and falling rates, the team challenge whether markets have become complacent. From Japan’s bond market and the unwinding of the yen carry trade, to a weaker US dollar, stubborn inflation risks and rising political volatility, this episode is all about understanding where the real risks, and opportunities, may lie next year.

This Week’s Focus, The Big Themes for 2026:

🇯🇵 Japan & the Yen Carry Trade

Why rising Japanese bond yields could trigger a global competition for capital, and why this matters far beyond Tokyo.

📈 Bond Yields & Competition for Capital

Long-dated government bond yields are rising as investors demand higher returns. What that means for equities, portfolios and risk appetite.

💵 Dollar Weakness

Stu explains why the US dollar could be one of the weaker major currencies in 2026, and why commodities may benefit as a result.

🔥 Inflation Isn’t Dead

Stronger growth, fiscal stimulus and a weaker dollar could keep inflation firmer than markets expect, reshaping rate expectations.

🏛️ Politics & Volatility

From US midterms to UK political instability, the team explore how political pressure often leads to market-moving policy decisions.

🤖 AI Meets Reality

After driving markets higher, AI stocks may face tougher questions in 2026 as investors demand real returns, not just promises.

Big Questions the Team Debate:

• Are markets underestimating inflation risks in 2026?

• Could Japan’s bond market be the catalyst for global volatility?

• Is a weaker dollar inevitable, and how should investors prepare?

• Can equities thrive if interest rates don’t fall as much as expected?

• Why sitting on some cash isn’t “bearish”, it’s optionality

What You’ll Learn:

✔️ Why consensus forecasts are often the least useful input

✔️ How rising bond yields can quietly pressure risk assets

✔️ Why commodities often outperform when currencies weaken

✔️ How professionals think about risk before it shows up in prices

✔️ Why investing is about positioning, not prediction

📧 Get in touch: theartofinvesting@ig.com

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Disclaimer

This podcast is provided for educational and informational purposes only. The content presented is not intended as personal investment advice or a recommendation to buy, sell, or hold any particular securities or investments. All discussions regarding the model portfolio are illustrative and for educational purposes.

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