It seems many readers are struggling to believe in my optimistic predictions for 2026. The phrase “yeah, but” pops up frequently. Sure, midterm chaos could happen. Is the bull market going to sustain itself? What about the weak dollar? All valid concerns, I guess.
Yet, to me, it’s like a catchy tune—it’s reassuring that, despite all the upbeat moods, there’s still a significant layer of anxiety in the stock market. Let’s try to forget about those “buts.”
Yes, midterms often lead to a standstill, which might have sparked what’s called a “midterm miracle.” But Trump may change the game this time.
Sir John Templeton once warned that the four most dangerous words in investing were “This time it’s different.” People believed the 2022 midterms would be unique. They weren’t.
The president’s party has typically lost House seats in 22 out of 25 midterm elections since 1926, averaging a loss of 26 seats, with a modest Senate loss as well. For Trump to break current patterns, he’d need a significant boost in his approval ratings, which are now at 36%—well below the historical average of 59% for a president at this stage.
I mentioned that AI isn’t creating bubbles. But is the S&P 500 perhaps overvalued?
Market ratings are unpredictable. November’s stats made that clear. For every overpriced market that crashes, there’s one that keeps climbing. Currently, profits are driving stock prices up, even with what seems like a high valuation.
Is Trump going to impose more tariffs?
Maybe! He has a penchant for using tariffs as leverage. With the USMCA renegotiation on the horizon, it wouldn’t be surprising. Concerns over tariffs were prevalent in 2025, but global trade still grew by 3.4%. Stocks climbed, as the actual impact of tariffs was mild. While “tariff terror” lost its edge, it did aid non-US stocks in outperforming US stocks last year and this year as well.
But isn’t this bull market too old to last much longer?
Age isn’t the enemy of bull markets. They tend to vanish because of declining fundamentals or excessive enthusiasm, or sometimes both. At 41 months old, this market still has room to run. Historically, bull markets average around 60 months. Only one market didn’t reach its fourth birthday.
But you’re overlooking the weak dollar. Isn’t that going to hurt stocks?
That’s more myth than reality. Currency fluctuations don’t dictate stock prices. The dollar’s 10.7% drop since 2025 isn’t out of the ordinary for a Republican president, being just shy of the 11.7% decline during Trump’s first term.
But isn’t the nation drowning in debt?
Nearly $40 trillion in debt is indeed staggering! But let’s not panic about big numbers taken out of context. While the share of U.S. debt payments in tax revenues has risen back to levels last seen in the 1980s and early 1990s, that didn’t necessarily crush GDP or stock values. Current debt levels remain manageable, and inflation-adjusted payments have even dropped.
And, aren’t all these layoffs a sure sign of an impending recession?
Actually, job creation in the private sector has offset the recent cuts. Employment is typically a lagging indicator—stock prices usually rise before job levels do. Layoffs won’t crush consumer spending or lead to a recession. That’s not how it works.
We’re hopeful for 2026, but why won’t it be as good as 2025?
Details surrounding the ‘mid-term miracle’ that usually boosts US stocks tend to come slowly. Midterm years are often lackluster, with intense campaigns creating anxiety. There probably won’t be enough time for a “miracle” to emerge with substantial profits by year-end.
So, the “yeah, but” crowd will persist. Stubborn fate and gloomy outlooks can dampen spirits. Honestly, I only start to worry when my optimism gets too high and those “but skiers” start colliding.
