After one of the most complex and data-heavy years investors have faced, many are asking the same question: what comes next for markets in 2026?
At RHP Wealth Management, a new year is always a moment to reflect on what happened the previous year, assess emerging risks, and work to position portfolios for what may lie ahead. The past year brought volatility, rapid technological change, and shifting economic narratives, but also meaningful opportunities for disciplined, long-term investors.
Read on to learn more about our 2025 market wrap-up and forward-looking outlook, informed by insights from Glenn Royal, Chief Investment Officer and Founding Partner at RHP, with over four decades of market experience.
What Defined the Markets in 2025?
A High-Velocity, Narrow Market
While headline equity returns looked strong, 2025 was anything but easy. Market performance was driven by a narrow group of mega-cap companies tied to artificial intelligence (AI) and advanced computing. Beneath the surface, many sectors experienced rolling slowdowns, heightened volatility, and uneven performance.
This divergence reinforced an important truth: index-level returns often mask meaningful dispersion across sectors, styles, and geographies.
Are We Still in the “Roaring 20s”?
Some market strategists believe the current decade may resemble a modern-day version of the Roaring Twenties. The foundation for that thesis includes:
- Massive fiscal and monetary stimulus following the pandemic
- Rapid productivity gains driven by AI
- A Federal Reserve that has begun shifting toward a more accommodative stance
While optimism is warranted, today’s environment is far more complex than past economic expansions, requiring careful risk management alongside growth exposure.
Inflation, the Federal Reserve, and Interest Rates
Inflation Trends Are Quietly Improving
Despite lingering concerns about affordability, inflation pressures have moderated. A majority of CPI components are now rolling over, allowing the Fed to shift its focus toward employment conditions rather than aggressive inflation control.
Markets are currently pricing in additional rate cuts in 2026, though uncertainty remains around:
- The long-term independence of the Federal Reserve
- The direction of longer-term interest rates
- Potential steepening of the yield curve
For investors, this environment favors flexibility and duration discipline, particularly within fixed income portfolios.
AI, Productivity, and the Next Phase of Market Leadership
From Builders to Beneficiaries
AI remains transformational, but market leadership may be evolving. After years of dominance by hyperscalers and mega-cap technology companies, attention is shifting toward end users of AI:
- Industrials and logistics firms improving efficiency
- Healthcare organizations leveraging automation
- Financial services companies reducing processing times
- Utilities and infrastructure providers supporting grid expansion
These productivity gains echo past technological revolutions, such as the internet boom of the 1990s, when innovation ultimately spread far beyond its original creators.
Volatility Is Likely to Increase
The rise of short-term trading tools—including zero-day options, leveraged ETFs, and speculative platforms—has amplified daily market swings. While these instruments can increase liquidity, they also introduce noise that long-term investors must learn to look through.
Energy, Infrastructure, and Global Opportunities
The Power Constraint Problem
AI’s computing demand is doubling every six to nine months, putting pressure on aging energy grids, particularly in the U.S. This has created opportunities in:
- Utilities
- Infrastructure
- Industrial build-out
Internationally, emerging markets with newer infrastructure and greater energy capacity may benefit disproportionately from global AI adoption.
Why International Diversification Matters in 2026
While the U.S. remains the core of most portfolios, selective exposure to international and emerging markets can:
- Reduce concentration risk
- Capture productivity gains abroad
- Provide diversification against U.S. policy and valuation risks
How RHP Is Positioning Portfolios for 2026
Risk Management Comes First
At RHP, we view ourselves as risk managers before return seekers. Portfolio construction begins with understanding the full scope of risks clients face: Market, tax, inflation, longevity, and lifestyle risks.
A Multi-Layered Portfolio Approach
Our portfolios seek to combine:
- Broad, cost-efficient market exposure (“cheap beta”)
- Actively managed ETF strategies from best-in-class firms
- Quantitative and AI-driven investment approaches
- Targeted thematic allocations (infrastructure, utilities, productivity)
Emphasis on Tax Efficiency
A key focus has been generating tax alpha—reducing unnecessary tax drag through:
- ETF-based structures that minimize capital gain distributions
- Strategic rebalancing
- Long-term holding discipline aligned with financial plans
Long-Term Perspective in an Uncertain World
Geopolitical risks, policy changes, and technological disruption remain ever-present. While no one can predict the next market shock, history tends to reward investors who:
- Stay diversified
- Remain patient through volatility
- Align portfolios with long-term goals rather than short-term headlines
Time—not timing—continues to be the most powerful ally in investing.
Looking Ahead
The road into 2026 will almost certainly include volatility, leadership shifts, and new challenges. But it can also bring opportunity for those who remain disciplined, diversified, and purpose-driven.
At RHP Wealth Management, our commitment is simple: to help families and individuals navigate uncertainty with clarity, confidence, and a long-term plan built around what matters most to them.
If you have questions about how today’s market environment fits into your broader financial picture, our team is here to help.