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This year, we’ve called our Year Ahead outlook “Escape velocity?” The question for investors today is whether the mix of artificial intelligence (AI) innovation, fiscal spending, and loosening monetary policy will help overcome economic constraints—debt, inflation, geopolitics—and accelerate the global economy into a new era of growth. 

AI is at the heart of the debate. Over the medium term, it has the potential to deliver the productivity improvements to help economies achieve a kind of 

“escape velocity.” But much will depend on investors’ willingness to keep funding it, tech leaders’ ability to monetize it, and the world’s capacity to supply the energy needed to power it. 

Debt is another critical factor. The longest US government shutdown on record has just ended, but this represents a deferral rather than a resolution of US debt challenges. And in many countries, government spending already looks to be at “escape velocity,” set to rise continually as a share of GDP unless policies are fundamentally changed. How governments respond to this challenge will have important market consequences. 

Deglobalization also looms large. Trade policy dominated the headlines in the early part of this year and triggered market volatility. The recent truce between the US and China should support some stability. However, their strategic rivalry and the trend toward supply chain restructuring and economic decoupling will likely persist, potentially fueling further volatility in 2026. 

Despite the uncertainty surrounding these questions, we believe durable principles for investing in today’s world are coming into focus. As I wrote in The New Rules of Investing and my “big problems, big money” thesis, understanding where capital is being deployed at scale is critical for investors. Our focus is therefore on ideas aligned with these forces. 

Our Artificial intelligence, Power and resources, and Longevity opportunities stand out as beneficiaries of both structural change and policy support. Rising debt points to a future of yield suppression, which could make income generation harder in the future. Meanwhile, the uncertainty around trade policy, domestic politics, and geopolitics strengthens the case for portfolio hedging and multi-asset diversification.  

In the remainder of this letter, I share our key investment ideas for 2026 and explore how investors can position for growth, income, and diversification in this evolving landscape.

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Nontraditional asset classes are alternative investments that include hedge funds, private equity, real estate, and managed futures (collectively, alternative investments). Interests of alternative investment funds are sold only to qualified investors, and only by means of offering documents that include information about the risks, performance and expenses of alternative investment funds, and which clients are urged to read carefully before subscribing and retain. An investment in an alternative investment fund is speculative and involves significant risks. Specifically, these investments (1) are not mutual funds and are not subject to the same regulatory requirements as mutual funds; (2) may have performance that is volatile, and investors may lose all or a substantial amount of their investment; (3) may engage in leverage and other speculative investment practices that may increase the risk of investment loss; (4) are long-term, illiquid investments; there is generally no secondary market for the interests of a fund, and none is expected to develop; (5) interests of alternative investment funds typically will be illiquid and subject to restrictions on transfer; (6) may not be required to provide periodic pricing or valuation information to investors; (7) generally involve complex tax strategies and there may be delays in distributing tax information to investors; (8) are subject to high fees, including management fees and other fees and expenses, all of which will reduce profits.

Interests in alternative investment funds are not deposits or obligations of, or guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other governmental agency. Prospective investors should understand these risks and have the financial ability and willingness to accept them for an extended period of time before making an investment in an alternative investment fund, and should consider an alternative investment fund as a supplement to an overall investment program.

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