2026 Patience: Stock Market Update, Friday January 9, 2026

Over the last 4 weeks the OHFG has released our thoughts on 2026 and what might be in store for the equity markets. If you’ve been watching our content, you’ll know that our team remains constructive overall on equities for the total of 2026, however we are expecting a heightened level of volatility in financial markets particularly in the 1h of the year. We titled our overall 2026 outlook “in Some Year’s, it’s Harder to Ride the Bull”.  Given my love of 80’s rock music and bands, if we have a theme song for our 2026 outlook, it would have to be “Patience”, the 1988 hit by Guns and Roses. Why? Well “Patience” is a rock power ballad about navigating a difficult relationship, emphasizing that love requires time, understanding, and calm, taking   it slow sometimes approach, for things to ultimately work out.  Sounds to me like a great recipe for investing in most years.  Sometimes, on rare occasions, it’s better to act fast and put more dollars to work aggressively, and walk away, as the stars align, the investment opportunities abound and the odds for higher than historic returns are in an investor’s favor. As we discussed in our previous videos, we do not expect the beginning of 2026 to play out as a move fast to invest market.

Here’s a repeat of the great data from Charlie Bilieo on annual drawdowns and their frequency.

Look at the above chart. -5% decline in the S&P500 happens nearly every year, while a -10% decline happens, every 18 months.  The last decline we had of over 6% was back in April of 2025.  Those bear market declines of -20% happens a little over once every 4 years while a recessionary decline of -30% happens 1 out of 10 years.

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.

Our team is thinking 2026 will likely be one of those more volatile years. We listed our 4 reasons for a nonlinear 2026 in our last few videos.  Let’s review them again. First, it’s the 2^nd year of the Presidential term and a mid-term election year.

The gain in a Presidents 2^nd year from 1940-2024 period, per Merrill Lynch, has been only +4.22% net, 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.

Here’s Merrill’s data set.  You’ll notice in addition to lower overall returning years., historically almost all the “net” gain on the year occurs in the 4q.

Besides a mid-term Presidential election cycle year in 2026, historically the market has a 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?

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.  Historically, the markets test the new Fed chair early in their terms. 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.

A new more dovish Fed Chairman would likely be cheered by the markets for a while, but don’t think it will be a straight line up 2026 market, that likely more a 2h26 timing.

Another headwind to the 1h2026 could be a seasonal uptick in the inflation numbers here in the USA is an uptick in market inflation expectations in the early months of the year seems likely. As we’ve discussed before, inflation readings in the US tend to be quite seasonal, rising in the 1^st quarter and slowing the rest of the year.  Concerns over catchup effects of goods tariffs, higher new year labor costs, and stratospheric medical cost increases, could investor and consumer sentiment just as investors begin to worry about Fed independence under a new chairman in the 1q.

Lining up for a stronger mid to 2h2026 move in the market is the progression of EPS and EPS growth in the S&P500. Currently bottoms up, FactSet’s EPS forecasts have 4q26 quarterly earnings expectations of about $82.5/s, up over 17% yty from the 4^th quarter 2025.  Remember investors, over longer time frames, stocks follow earnings and historically, unlike market bottoms that anticipate recoveries, the market doesn’t historically peak in front of earnings but rather coincidentally.

As one can see, there will be pushes and pulls in 2026 but one of the things that is top of mind for our investment team is sustained heightened market volatility throughout most the year and with that the need for investors to have, “A little Patience”. At least a little more than in most other years.

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