Dear Financial Samurai,
We kick off the first full trading week of 2026 in style, with the S&P 500 reaching a new all-time high of 6,966 following a benign jobs report. So far, the market has shrugged off the capture of Venezuela’s Maduro, with crude prices roughly flat for the week at $58.62.
As I spent time thinking more deeply about my 2026 stock market forecast, I couldn’t help but reflect on 2022. After two amazing years, we gave back about 20% of our gains, with some large-cap tech stocks falling roughly 50%. After three consecutive years of double-digit returns, it’s hard not to worry that something similar could happen again in 2026.
A midterm election year has historically been volatile due to uncertainty over which party retains power, and I’m convinced we’ll see another 10%+ correction at some point this year. That said, President Trump has been making a number of populist announcements, including:
- Calling for a 10% cap on credit card interest rates
- Banning institutional investors from purchasing single-family homes
- Buying $200 billion of mortgage bonds to narrow spreads and lower mortgage rates
- Pressuring the Fed to cut interest rates to 1% in 2026
- Announcing $2,000 tariff stimulus checks
- Making $2-per-gallon gas prices a priority
From a consumer’s perspective, there’s the potential for a lot of benefits. From an investor’s standpoint, the more money people get to keep, the more they’re likely to spend, thereby boosting economic growth and corporate profits.
Despite all this, I’m no longer going all-in on risk assets. Instead, I’m taking a more balanced approach by rebuilding my cash hoard in 1Q2026.
New Posts:
- My Investment Outlook for Public and Private Stocks in 2026 – Highlights Wall Street estimates, my own projections, and how I plan to invest.
- Be Careful Buying the Dip Too Often, Too Soon – Given my belief that a dip is coming, I share a case study from Q1 2022 when I kept buying the dip at the wrong time, along with the lessons learned.
Goals For 2026
Because 2025 beat me up mentally, I’ve decided to take things easier in 2026. The problem with always trying your hardest is that your expectations rise as well. And the higher your expectations, the greater the disappointment when results or people fall short.
The logical conclusion is to relax more. The idea is similar to optimizing your Return on Effort (ROE). In a bear market, the more time you spend trying to make money, the lower your ROE can become. Paradoxically, during difficult times, working less hard may actually improve your ROE.
Here are my resolutions for 2026. I’d love to hear some of yours.
Good News on the Mortgage Front
Although the 10-year Treasury yield remains stubbornly high at around 4.17%, the average 30-year fixed mortgage rate has declined to 5.99%, compared to about 7.1% this time last year. The reason is that spreads are narrowing, likely in part due to the intended purchase of roughly $200 billion of mortgage-backed securities by Fannie Mae and Freddie Mac.
Meanwhile, many of you should be able to secure a 30-year fixed mortgage rate about 0.5% below the average, or closer to 5.5%. And if the Fed cuts rates another two times, to 3.0%–3.25% from 3.5%–3.75%, there should be at least some downward pressure on long-term rates.
Net-net, this is positive for the real estate market in 2026.
Get Your Free Checkup and a Signed Copy of Millionaire Milestones
At the start of each year, I do a deep dive into my investments and set fresh goals. This year feels especially important given how much has been made over the past three years and how bullish sentiment has become. In such an environment, it’s helpful to speak with someone to ensure there are no obvious blind spots that could materially hurt your net worth.
I suggest signing up for a free financial consultation with Empower to review your investments. I’ve spoken with them twice, and each time I uncovered new opportunities to optimize and build more wealth.
In addition, after you complete your final call with an Empower financial professional, send me an email with your name and mailing address. I’ll send you a personalized, signed hard copy of my bestseller, Millionaire Milestones. For book collectors, these are first-print editions, with fewer than 200 signed copies in existence since I don’t do book tours.
To your financial freedom,
Sam
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