A Consensus Multipolar Bull

I couldn’t escape it even if I tried, but of course, I’m not trying. You see, the year is almost over, and the holiday season is here. Yet the arrival of the holidays also means it’s time to unwrap the basket of yearly presents that are the outlooks and market predictions from experts and investment banks, outlooks that are sometimes prescient, frequently off the mark and often just plain obvious.

Still, putting on one’s prognostication hat is a valuable exercise and thought experiment of sorts, because it forces us to look at the current market environment and see what forces are likely to shape the markets and the economy in the 12 months to come. Sometimes the experts get it right, and sometimes we get it wrong (yes, that includes me).

Hey, no man or organization is infallible, and the reason why we can’t be certain about what’s to come in markets is because human behavior and human action is not predictable in the details. Yes, there are general principles of human action we can use as the basis of our assessment. The great Austrian economist Ludwig von Mises called this study of the principles “praxeology,” which essentially posits that individuals act intentionally to alter an unsatisfactory state, using scarce means to reach desired ends.

The details of this human action are so varied and so voluminous that keeping track of it all is virtually impossible. Yet what isn’t impossible, albeit is very difficult, is to project out what we think might happen going forward based on the data we have now.

On that front, I’ve read multiple 2026 market outlooks of late, and the consensus opinion is that the 2025 bull will continue running in the year to come. According to my research, Wall Street strategists are forecasting a median gain of between 11% to 17% for the S&P 500. From current levels, that would bring those targets to a range of approximately 7,600 to 8,000.

Primary drivers of this bullish outlook are continued strong corporate earnings growth, particularly from the artificial intelligence (AI) boom, and those much-anticipated interest rate cuts by the Federal Reserve, which are likely to continue in the year to come, especially given that President Trump is going to appoint a new Fed chair that will be much more “dovish,” i.e., more willing to lower interest rates, than current Fed Chair Jay Powell.

Of course, every potential positive comes with a potential negative, because economic growth and earnings growth are never guaranteed. If the broader economy begins to contract, or if earnings growth contracts, that will be a headwind blowing strongly in the face of the bulls. On the AI front, we’ve already seen that trade come back to reality somewhat, as so-called “AI skepticism” has become a fear embedded into the market since about mid-November.

One assessment/outlook for 2026 that I found particularly interesting comes from Goldman Sachs (the best firm on Wall Street, in my opinion). One subtitle in the 2026 outlook is, “Equities in a Multipolar World.” Apart from the witty wordplay, I found this commentary interesting, and worth the entire read if you are so inclined.

Goldman basically argues the following:

The global economic and geopolitical environment is adopting a more multipolar structure, in our view, resulting in greater fragmentation and a broader array of opportunities for equity investors.

The U.S. stock market continues to be driven by advancements in and investor sentiment towards AI, with leading companies harnessing technology and scale to achieve remarkable growth.

We believe maximizing equity diversification and managing risk effectively is essential given the investment backdrop. In our view, this can be achieved through active exposure, a global presence and regional expertise; combined with a strategic blend of fundamental and quantitative equity strategies.

I concur with this view, and I also believe that maintaining an “Investing Edge” through diversification, risk management and active exposure in the best-of-breed stocks selected via a blend of fundamental and quantitative strategies will be the approach that provides that edge, even if those consensus bullish Wall Street forecasts fail to come to fruition.

If you want to harness the power of that “Investing Edge,” then my newsletter of the same moniker is just for you. This holiday season, give yourself the gift of the Investing Edge, and do so today.

The best part is you won’t even have to wait until Christmas to unwrap it!

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Collapsible Plans

Life is what happens when you’re busy making other plans

Said a hero of mine who died way before his time

He got shot for signing an autograph from one of his biggest fans

How’s that for collapsible plans…

–Tom Freund, “Collapsible Plans”

My friend and folk rocker extraordinaire Tom Freund’s masterpiece, “Collapsible Plans,” is a meditation on loving life, and on life’s fleeting nature. In the above lyrics from the song’s bridge, Tom references John Lennon’s famous quote on life, and his subsequent tragic death. The recent string of deaths in the news, and particularly those of Rob and Michele Reiner, made me think of this great song. You see, life is an evanescent prospect at best. It’s up to us to do whatever good we can with whatever time we’re permitted. Never forget this.

The above photo of Tom (mandolin) and me (Rhodes piano) was taken last year during the recording of my album “Tender Warrior.” It was an honor to create art with Tom, and to do the things that make life sublime. If there’s something you’ve ever wanted to do, ignore the voice within delivering excuses and just go do it.

Wisdom about money, investing and life can be found anywhere. If you have a good quote that you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

In the name of the best within us,

Jim Woods