Retiring in 2026…Oak Harvest’s 2026 Market Outlook: Part 3 – Dovish Federal Reserve BUT!…
This week’s topic, the 3rd part of our Oak Harvest’s 2026 market outlook. We’ve been doing these forecasts for over 5 years now at Oak Harvest. Our goal is to give our clients and prospects an idea of what issues, as well as opportunities the Oak Harvest investment team thinks the coming year might present investors.
There are times when tactically, the investing odds favor going faster and investing more, and their other times, like going into 2020, that it was time to “curb your enthusiasm” and proceed more cautiously.
As we’ve seen a few years, like 2017, lack volatility. The bull strolls out of the gate, and your ride is over in 12 relatively uneventful months. An investor looks back at year end and it looks like nothing eventful happened, but your portfolio of stocks gained. However, more often, like 2025, you look back and the markets and your investments endured a few bouts of downside volatility. Most years, even in strong bull markets, the bull tries to buck investors off its back onto the ground. Hopefully an investor ends the year without being gored. Our team is thinking 2026 will likely be one of those more volatile years. We previously discussed the elevated volatility in a mid-term election year like 2026 will be.
The gain in a Presidents 2nd year from 1950-2023 period has been only +4.6%, less than half the average annual S&P 500 gain of about 10%. Remember these are point to point returns at the start and end of the year, and they don’t include intra year highs and lows. That is, they don’t include volatility throughout the year.
For 2026, throw into the mix it’s a mid-term Presidential election cycle year equation and the markets history of “testing” a new Fed Chairmen during their first term, and investors should be wary late 1q and 2q of 2026. What am I talking about?
Well let’s talk about it. Clearly, President Trump is looking to nominate a more dovish Fed chairmen as Powell exits in the 1h2026. While this is likely to be bullish longer term for equities, it doesn’t guarantee a smooth ride during 2026. The Chairmen is just one vote and while they have sway, they don’t cast votes for others. The last two Fed meetings are case in point to the Fed becoming more divided on the future path of interest rates. Believe the “dot plot” or not? Believe the dissentions or not? These events are becoming more regular the last year.
Historically, the markets test the new Fed chair early in their terms. What am I talking about? Here’s a list of recent FOMC chairs and what happened during their first 12 months in the lead. Lots of negative peak to trough numbers there.
The team at OHFG believes that past market cycles have been proving quite omnicient in their predictions of markets under Trump 2.0, saving the -10%, 5 day decline around early Aprils Tariff Tantrum.
A similar outcome to Trump 1.0 and the previous Dot.com cycle prevailing in 1q26 triangulates to over 7200+ in 1q26 for the S&P500, followed by a sharp fall in mid-year into the time period when the new Fed Chair steps in, call it mid to late April.
Would it be coincidence that right around when a future low would show up on this “cycle replay” is when a new sitting more dovish Fed Chair hits the FOMC. I don’t think so. I also think that future rounds of QE in longer term treasuries are in the offering as a future fed looks to try to control longer term yields as an offset to higher inflation, higher risk premiums for overspending, or just an upward drift in global long term interest rates.
A new more dovish Fed Chairman would likely be cheered by the markets for awhile, but don’t think it will be a straight line up 2026 market.
As one can see, there will be pushes and pulls in 2026 and we will address more of each in coming videos. For 2026, one of the things that is top of mind for our team is sustained heightened market volatility.
The good news is, our investment team has experience in these types of volatile and bucking bull markets. Remember that elevated volatility also means elevated opportunity, for longer term investors.
What does all this mean to you?
Keep following our investment content on our Oak Harvest Website and our YouTube Channels and we will be addressing more of our outlook in the next few weeks. And tune into our Livestream YouTube with Troy, Charles, and myself for our 2026 Market Outlook on —Jan 29.2026-.
Investors, whether 2026 plays out as a bucking bull ride or something different, the entire OHFG team is here for our clients doing what we can to plan for you and your family’s future regardless of what stage you are at in your career or retirement.
Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect
Chris Perras
CFA®, CLU®, ChFC®
Chief Investment Officer, Financial Advisor
Chris is a seasoned investment professional with over 25 years of experience working with some of the most successful money management firms in the world. Chris has made it a point in his career to adapt as the market landscape changes, seeking to utilize the appropriate investment strategy for a given market environment. His transition from managing billions of dollars at the institutional level to helping individuals and families retire is guided by a desire to see first-hand the impact he is making in the lives of clients at Oak Harvest.
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