2026 Investment Outlook: Bubble Watch & the Elusive Pin
Weekly Investment Update | By Brian Schreiner
After three straight years of double-digit gains, U.S. stocks entered the new year with positive momentum. Every Wall Street analyst is predicting another positive year for the S&P 500 and asset managers are bullish too—at the third highest rate on record.Even
the stock market standing at the most extreme valuation levels in history, Wall Street’s bullish targets are the most concentrated in nearly a decade. On average, analysts are expecting the S&P will rise by 11% in 2026 driven by strong corporate earnings, accommodative Fed policy and economic growth boosted by tax cuts and fewer regulations.
Despite the bullish tone on Wall Street, many are concerned that U.S. stocks are in bubble territory.
Jean-Baptiste-Siméon Chardin | The Soap Bubble (1739)
Despite the bullish tone on Wall Street, many are concerned that U.S. stocks are in bubble territory.
The four ‘O’s that shape all bubbles— overvaluation, over-ownership, over- investment and over-leverage—are flashing red. Those of us on bubble watch know that extreme bullishness is a contrarian indicator, but the pin has been elusive. Why?
In my view, there are a number of powerful forces shaping the AI bubble and the broader U.S. stock market that make it unique in history.
To continue reading, please download our 2026 Investment Outlook here.
Note to Clients: A direct link to the outlook was sent to you by email along with your quarterly performance report. If you’d like me to resend that email, contact me at brian@alpharockinvestments.com.
“The world is not driven by greed, it’s driven by envy.”
~ Charlie Munger, Berkshire Hathaway
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This commentary reflects the personal opinions, viewpoints and analyses of the Alpha Rock Investments, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Alpha Rock Investments, LLC or performance returns of any Alpha Rock Investments, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Alpha Rock Investments, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.
The S&P 500 Index or the Standard & Poor's 500 Index is a market-capitalization-weighted index of the 500 largest U.S. publicly traded companies. The S&P 500 is a float-weighted index, meaning company market capitalizations are adjusted by the number of shares available for public trading. Note: Investors cannot invest directly in an index. These unmanaged indices do not reflect management fees and transaction costs that are associated with most investments.
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