Quarterly Commentary

What Can We Expect in 2026?

As we close out 2025 and begin looking ahead to the new year, it’s a natural time for perspective — and a little reflection.

It wasn’t that long ago that markets felt far less certain. In 2022, global equity markets experienced a bear market, with stocks declining more than 20%. Yet in the three calendar years since, markets have delivered strong positive returns. By the end of 2025, both U.S. and global equity markets were once again near all-time highs.

Throughout the year, markets repeatedly set new record levels. U.S. stocks, in particular, reached dozens of new all-time highs during 2025, supported by solid corporate earnings, continued economic growth, and optimism around technological innovation, including artificial intelligence. For many investors, that naturally raises an uncomfortable question: Can this really continue? Or put another way, aren’t we overdue for a downturn?

As you know, we are not prognosticators or fortune tellers, nor do we claim to predict the future in any meaningful way. Markets have a long history of humbling those who try. But while we cannot know what 2026 will bring, history does offer helpful context for setting expectations.

Since the turn of the century, equity markets have experienced multiple bear markets — including the technology bust, the Global Financial Crisis, the COVID shock, and the inflation-driven decline of 2022. Each felt unsettling in the moment. Each raised doubts about what came next. And yet, over time, markets recovered and went on to reach new highs.

Looking further back reinforces the same lesson. In Expected Returns, Antti Ilmanen demonstrates that real (after-inflation) equity returns have averaged roughly 7% per year over very long periods of history, across different regions of the world. This consistency persisted through world wars, depressions, political upheaval, and financial crises. While no period is guaranteed to resemble the past, this long-term perspective reminds us that growth — though interrupted at times — has been a defining feature of markets for the last 225 years or so.

It’s often said that history doesn’t repeat itself, but it does rhyme. That feels especially relevant today. Economic growth continues globally, and innovation remains a powerful long-term force. Over time, progress has been driven by advances such as railroads, electricity, automobiles, the internet, and now artificial intelligence. Each era has brought excitement, skepticism, volatility, and ultimately, adaptation.

None of this suggests that markets move in straight lines. Temporary downturns are inevitable, and they often arrive without warning. But history suggests that disciplined, diversified investors have been rewarded for maintaining perspective through periods of uncertainty.

Importantly, our approach does not hinge on short-term forecasts or macroeconomic predictions. Risk tolerance and asset allocation are driven far more by personal circumstances than by headlines. Retirement timelines, cash-flow needs, tax considerations, and family priorities a more important than guesses about next year’s market returns.

If your circumstances change — whether through retirement, a move, a family transition, or a shift in income needs — we encourage you to reach out. Those moments are exactly when thoughtful planning makes the greatest difference.

As we turn the page on 2025, we remain focused on discipline, diversification, and long-term perspective. Thank you, as always, for your trust. We look forward to continuing the journey together in the year ahead.

Happy New Year!

Your friends at Fort Vancouver Investment Management, LLC