Follow the Money: Top 10 Investment Themes for 2026
As we enter 2026, it’s worth reflecting on last year’s market trends and looking ahead. In 2025, our macro theme, “Growth Opportunities Ahead,” proved accurate. The bull market celebrated its three-year anniversary, and while the “Magnificent 7” stocks—Nvidia, Apple, Microsoft, Amazon, Alphabet, Tesla, and Meta continued to lead, thematic sectors like AI infrastructure, power, aerospace & defense, biotech, and international equities delivered impressive returns.
For investors concerned the bull market may be long in the tooth, history offers perspective. Over the past 50 years, bull markets that reached their third year continued to grow, with the shortest lasting five years and the average eight years. While past performance is no guarantee of future results, patience remains key: the S&P 500 rebounded 38% from its April 2025 low to year-end, highlighting the risks of trying to time the market.
Interest rates also shaped the market narrative. The Federal Reserve cut rates three times in 2025, with another cut expected in 2026, bringing the Federal Funds Target Rate closer to the neutral 3%. Fed Chair Jay Powell’s tenure ends in May 2026, and the incoming chair is likely to favor additional rate cuts, which could influence market performance.
Looking ahead, we believe the overarching theme for 2026 is simple: Follow the Money. Certain sectors positioned for significant spending and growth may outperform, while overvalued areas could face pressure.
To hear more about these insights directly, check out our video featuring Kevin Mahn and Matthew Wolcott as they discuss the top investment themes for 2026. In the video, they break down where capital is flowing and which areas investors should watch closely.
Here are the top 10 themes shaping 2026:
- Heightened Demand for Power Solutions
- AI Infrastructure Boom Continues
- Global Defense and Security Upgrades
- Small-Cap Biotech M&A Tailwinds
- Modest Rate Cuts and Steady Economic Growth
- Expect Short-Term Volatility
- Municipal Bond Strength
- Favorable Environment for Regional Banks
- Dividend Growers as Portfolio Builders
- International Equities for Diversification
As always, investment decisions should align with your objectives, time horizon, and risk tolerance. The lesson for 2026? Follow the money, stay diversified, and focus on long-term trends rather than short-term noise.
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Disclosures: This material is intended for general informational and educational purposes only. It is not intended to be a recommendation or investment advice, and it does not constitute a solicitation to buy, sell, or hold a security or an investment strategy.
Hennion & Walsh Asset Management currently has allocations within its managed money program, and Hennion & Walsh currently has allocations within certain SmartTrust® Unit Investment Trusts (UITs) consistent with several of the portfolio management ideas for consideration cited above.
Investing involves risk, including loss of principal. To determine if a Trust is an appropriate investment for you, carefully consider the Trust’s investment objectives, risk factors, charges, and expenses before
