2026 Outlook: The Policy Engine

The year 2025 exemplifies the prevailing regime — markets driven less by fundamentals and traditional business-cycle dynamics and more by fiscal and monetary policy influence. Today, policy decisions have emerged as one of the most impactful forces driving market direction.

What does that mean for 2026? We believe investors should remain patient and avoid overreacting to short-term sentiment swings — as policy and momentum-driven markets cause severe fluctuations in price, which can challenge behavioral biases. We saw this when stock prices swung wildly in 2025 and expect higher volatility to persist.