Markets have an uncomfortable habit of rewarding certainty right up until the moment they punish it. Over the past decade, investors have grown used to a familiar set of beliefs: the biggest US companies are the safest place to invest, technology will continue to dominate returns, the US dollar is the ultimate safe-haven, and emerging markets are simply too risky. However, as the investment landscape shifts, these assumptions deserve to be challenged.
Geopolitical tensions are resurfacing, governments are reshaping priorities, and central banks face growing political pressure. None of this guarantees immediate disruption, but it does suggest that the investment environment is becoming more uncertain and less forgiving of complacency.
In times like this, edge rarely comes from bold forecasts. It often comes from asking better questions, understanding what’s priced in, and being willing to look beyond the comfortable.
In this article, we explore six questions that we believe investors should be mindful of in 2026.
1. Is American exceptionalism now beyond the biggest stocks?
The US stock market has become increasingly concentrated. A small group of mega-cap companies dominate index returns, with valuations well above the rest of the market.
Crowded trades feel reassuring because so many investors are positioned the same way. But when expectations are stretched and ownership is concentrated, the margin for error narrows. In practice, the risk is not only the valuation you pay, but also the fragility that can come from everyone sharing the same exit.
History suggests that periods of narrow market leadership often coincide with rising risk. The question is whether the next phase of “US exceptionalism” comes from the same familiar names or from overlooked parts of the market that have attracted fewer eyeballs.
And few areas illustrate “crowded confidence” more clearly than the next question: AI.
2. Is AI a bubble or is the best yet to come?
Artificial intelligence is a genuine technological breakthrough—that much is hard to dispute.
What is less certain, is whether today’s prices reflect realistic outcomes. Rapid adoption, heavy spending and soaring valuations are also hallmarks of past investment manias. In many cases, the technology endured but investors who paid “any price” did not. Rather than trying to figure out whether AI is a bubble, it’s more useful to look at the areas where AI is already changing the economics of businesses.
Some of the more durable beneficiaries can be found in areas facilitating the growth of AI: the infrastructure and energy required to power data centres; industrial enablers, and sectors using AI to improve productivity rather than selling “AI” itself. Paying for perfection is rarely a robust strategy. We believe seeking exposure where the economics are improving—without relying on heroic assumptions—may offer a more balanced risk-return profile.
If AI and mega-cap stocks have dominated attention, the next question is whether portfolios have become unintentionally over-reliant on a single market narrative.
3. Are investors swimming in the right water?
Australian investors often have significant exposure to domestic assets and US equities. That concentration has been rewarded for years, which is precisely why it warrants re-examination.
As the US becomes more inward-focused, other economies are adjusting. Many non-US markets now trade at discounts in both equity valuations and currencies—a combination that is relatively rare. Lower starting valuations don’t guarantee strong returns, but they do change the equation: expectations are often more modest and it can take less good news to surprise on the upside.
After a decade of neglect, markets outside the US are under-researched and inefficient. While this creates opportunity, it also highlights the risks of portfolios that are built around a single narrative. When regimes change, yesterday’s “safe” default can become tomorrow’s biggest risk—making it important to broaden out exposures.
If broadening the opportunity set matters, the next question is where risk may be mispriced, particularly when an entire region or asset class has been written off.
4. Which is the bigger risk: owning or avoiding emerging markets?
Emerging markets carry well-known challenges, including political uncertainty and currency volatility. These risks are real and should not be dismissed. But risk cannot be considered without reference to price.
Today, many emerging market companies trade on materially lower valuations than developed markets. Return prospects could improve meaningfully if conditions simply stabilise rather than dramatically improve. In other words, the hurdle for “good enough” outcomes may be lower than in richly-priced markets.
The key is selectivity. “Emerging markets” is not a single trade. It’s a collection of countries, currencies, governance regimes, and business models. Some markets have strengthened policy frameworks over time, and many companies have improved balance sheets and capital discipline. Others have not. The practical question then is whether avoiding emerging markets entirely reduces risk or simply concentrates it elsewhere.
Diversification is not about owning what feels safest, it’s about spreading exposure to different drivers of growth. At current prices, selective exposure may be less risky than blanket avoidance.
That naturally raises another overlooked concentration: currency. When portfolios are dominated by one equity market, they are often dominated by one currency as well.
5. Is the world’s safest currency actually the riskiest?
The US dollar has long been treated as the world’s ultimate safe haven. Yet rising debt levels, persistent fiscal deficits and the prospect of looser policy are testing that assumption.
No currency maintains its dominance forever without challenge. Heavy reliance on a single currency may introduce risks that only become visible during periods of stress, particularly if its role as a shock absorber weakens at the same time risk assets fall.
This is not an argument for abandoning the dollar. It is an argument for recognising that currency exposure is part of portfolio construction, not an afterthought. A more balanced approach—one that recognises
valuation, fundamentals, and diversification benefits across currencies—may help manage uncertainty more effectively.
Beyond markets and currencies, there is a bigger regime shift underway: governments are reprioritising resilience. That changes where capital flows and what might potentially get rewarded.
6. What if Trump is right?
Across the world, governments are re-prioritising energy security, food supply, defence, and critical infrastructure. This is not a short-term political cycle; it looks more like a structural adjustment.
Efficiency is no longer the sole objective, resilience now matters. When supply chains are questioned and geopolitical risk rises, nations tend to focus on foundational needs. That shift can reshape opportunity sets: energy grids, defence and other essential services that societies can’t function without.
Companies aligned with these priorities may benefit from sustained policy and capital support, yet many remain less celebrated than the growth narratives that have dominated the last decade.
Why challenging consensus matters
Successful investing rarely comes from following the most comfortable story. It comes from understanding expectations, identifying mispricing and having the discipline to act when opportunities appear.
In 2026, investors face a more fragmented and unpredictable world than the one they grew accustomed to. That does not eliminate opportunity, it just changes where it can be found. The most valuable skill may not be forecasting the next trend but recognising when long-held certainties deserve to be questioned. In a less forgiving regime, better outcomes often come from better questions—asked early and revisited often.
Challenge consensus, test portfolio resilience, and prepare clients for what’s next with six courageous questions for 2026.
