Welcome to 2026

The number year has changed, but the whirlwind continues.

This includes the capture of the President of Venezuela with no plan other than oil, and even that is in a state of flux. Consistent with contradictory goals, the administration wants to increase the supply of oil to lower the price of gasoline for the mid-term elections; however, the lower price of oil makes exploration for oil unprofitable. We will see how that gets resolved.

From the Wall Street Journal today:

“For six of the past seven years, the S&P 500 has moved in the same direction during the first five trading days in January as it did for the rest of the year. Over the long term, the first week of trading and the full-year performance move in the same direction 68% of the time, according to Dow Jones Market Data research going back to 1950.”

Except when it doesn’t.

This is the year for a decision regarding Federal Reserve Chairman Powell. Who will replace him, and will he remain a member of the Federal Reserve Board? The President has made it clear he expects the next chairman to lead the charge for lower interest rates, despite very solid GDP growth in the third quarter above 4% and continued inflation concerns, with CPI remaining closer to 3% than the Fed’s goal of 2%.

Analysts and brokerage firms continue to expect significant returns for the S&P 500 in 2026, but there is a wide range of expectations. Howard Marks, a world-renowned analyst and investor and founder of Oaktree Capital Management, has 100% of his personal funds invested overseas. In 2025, international returns beat U.S. domestic returns for the first time in quite a number of years. Will this continue? Depends.

Since the beginning of the year, the Dow Jones Industrial Average is outperforming the S&P 500 and the NASDAQ. Value is outperforming growth so far. It is very early, but anything not technology or AI appears to be at the top of investors’ lists.

Markets are important, but they are not the whole picture when it comes to personal financial planning. There are tax changes for 2026, as in many other years. The nature of taxes is change — good for tax preparers and accountants, but not so good for individuals and businesses, particularly when doing your own taxes or paying someone whose responsibility is to stay up to date.

IRS inflation adjustments for tax year 2026:
https://www.irs.gov/newsroom/irs-releases-tax-inflation-adjustments-for-tax-year-2026-including-amendments-from-the-one-big-beautiful-bill 

Provisions of the 2025 tax bill passed by Congress:
https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions 

Google’s artificial intelligence engine, Gemini, will now appear routinely in Google searches unless you opt out. Google’s advancement in artificial intelligence, as represented by Gemini 3.0, has taken investors and markets by storm. Unlike OpenAI, Google generates billions of dollars in profit outside of AI and can use those funds — along with its existing market reach — to attract new users willing to pay.

Sometime soon, possibly as early as Friday, the Supreme Court could rule on the legality of Trump’s tariffs. Ironically, if the tariffs are ruled illegal, it could be the best news the administration receives this year on the economy. Stocks could rally, and interest rates could head lower as a major headwind — the cost of tariffs — is removed. Returning funds to those who paid tariffs, however, could become a bureaucratic nightmare. Don’t hold your breath.

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