Markets never sit still. Geopolitics shift overnight, economies seem to pivot without warning, and investor sentiment can turn on a dime. As we enter 2026, many investors will seek comfort in clearly articulated predictions—after all, certainty feels good. But the truth is, attempting to make definitive predictions about the year ahead can do more harm than good.

Take 2025 as an example—markets, even the largest and most researched, have a way of humbling forecasters. As figure 1 shows, most ‘Wall Street’ firms set lofty expectations for US stocks in 2025, cut their targets after President Trump’s tariff shock in April, then raised them again as prices recovered over the subsequent months.

An investor blindly following those forecasts would have ended up doing exactly what we try to avoid—buying high and selling low. That’s why Morningstar’s 2026 Outlook isn’t about prediction—it’s about preparation. We’ve brought together our best research and insights from analysts and investors across Morningstar to help you navigate whatever comes next.

Each of the six sections in this outlook explores a key challenge investors face in 2026 and beyond:

AI Arms Race: The Biggest Buildout You Never Saw Coming

Beyond the buzz around chatbots, tech giants are driving a global infrastructure surge. Capital spending now exceeds that of entire sectors like energy. The scale, risks, and valuation pressures reveal how deeply investors are already exposed—and why balance is essential.

Asia Outlook: China’s Quiet Reset

China is tackling deflation with a bold policy shift aimed at curbing overcapacity. Industry leaders in electric vehicles, batteries, and cement stand to benefit. For investors willing to look past short-term uncertainty, this could mark the beginning of a more disciplined and profitable cycle.

Beyond the Magnificent Seven: Rethinking Market Leadership

A handful of mega-cap stocks have powered US market returns but left portfolios vulnerable to concentration risk. We examine the opportunities outside this group.

Income Investing: Yield Is Back but Risks

Remain Higher interest rates have revived income opportunities across bonds and equities, but not all yield is built to last. Resilient income depends on navigating inflation, tight credit spreads, and valuation risk.

Navigating Uncertainty: Prepare Without Overreacting

Markets remain unpredictable, and 2026 may bring fresh challenges from tariffs, central bank shifts, and geopolitical tensions. We outline the key investment and behavioural strategies for successful investing whatever the future holds.

Retirement Investing in Australia: Meeting Today’s Needs Without Sacrificing Tomorrow

As more Australians enter retirement with greater wealth, the challenge shifts from growing assets to generating sustainable income and managing risk. This new objective requires a different approach. We consider how investors can respond to that challenge.

Access the report