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2025 was another positive year for most investments, particularly when denominated in
US dollars.
The fall of the US dollar contributed to outsized gains for stocks outside the US, with the
MSCI ACWI ex-USA index up over 31% to year-to-date (YTD).
More general currency weakness may have contributed to the staggering returns seen in precious metals,
with gold and silver posting YTD gains of 70% and 150%, respectively.
While the majority of stock indices surpassed expectations, cryptos struggled—all major
coins are in the red YTD, even when denominated against the falling US dollar.
Bonds did well, with Vanguard's BND returning over 7% at the time of this writing.
In this article, we explore 2025 performance compared to predictions, and then focus on projections for 2026.
We include predictions from prominent institutions and individuals on stocks, bonds and other assets.
Below is a quick summary of the highlights.
- From the sources you’ll see below, the average prediction is for the S&P 500 to grow 11% in 2026.
Many expect small cap stocks to earn more, boosted by falling interest rates and higher earnings growth.
- For Bitcoin, the average 2026 prediction was over 160,000 USD—an implied return exceeding 80%!
Bitcoin predictions have historically been wildly optimistic though.
- The sources considered here gave an average prediction of a 5% increase in gold price.
The article is organized as described below.
Stocks
At the time of this writing, the S&P 2025 has returned about 17.5% YTD,
well above the median analyst forecast of 10.5%.
Stocks outside the US have fared even better, with
Vanguard's ex-US ETF VXUS returning over 30% YTD.
Outperformance of ex-US stock is something we'd been anticipating, but took longer than
expected to come to fruition.
What’s in store for 2026?
From the sources below, the mean and median expected return for the S&P 500 in 2026 is 11%.
Predictions ranged from 2% to 17%.
As always, take these with a grain of salt—our article on
annual return predictions showed
how poor these predictions have been historically.
| Source | 2026 Year-End Target | Implied Return |
|---|
| Oppenheimer | 8,100 | 16.88% |
| Deutsche Bank | 8,000 | 15.44% |
| Morgan Stanley | 7,800 | 12.55% |
| Wells Fargo | 7,800 | 12.55% |
| Tom Lee | 7,700 | 11.11% |
| Citi / UBS | 7,700 | 11.11% |
| Goldman Sachs | 7,600 | 9.67% |
| JPMorgan / HSBC | 7,500 | 8.23% |
| Bank of America | 7,100 | 2.45% |
| Consensus Median | 7,700 | 11.11% |
| Mean | 7,700 | 11.11% |
Some of the rationale behind these predictions is discussed in the sections below.
Earnings
Consensus S&P 500 earnings estimates for 2026 are about 12-15% above 2025 levels.
It's believed this growth will be better spread around the index than in recent years,
when the magnificent 7 absorbed the lionshare of earnings growth.
A primary factor here is easing monetary policy—most expect a minimum of one rate cut, but more likely
2-3 cuts in 2026.
Valuation
Even with solid earnings growth, it's hard to imagine tremendous S&P 500 returns in 2026.
Most valuation metrics put the index well above historical norms, and
this typically damps future returns. This also puts the index at risk for a larger
drop if earnings disappoint—that would likely drop valuation multiples in addition
to fundamentals.
AI
Massive AI spending is expected to continue throughout 2026, with positive short-term stock price impacts.
The longer term affects, however, make me nervous. Much of this spending is fueled by
debt, and it's likely that some of the big spenders aren't going to deliver the profits
necessary to justify and pay their debts. This pain, if it is delivered, is expected to be
post-2026.
Geopolitics
Geopolitics continues to be a seemingly underestimated threat.
Russia, North Korea, China and factions in the Middle East are actively fighting western influence.
Further spread or escalation of problems in the Red Sea, Ukraine and Middle East could eventually impact business.
For example, cyberattacks could handicap tech companies.
More missile/drone attacks on trade routes could further slow and increase shipping costs,
setting back globalization and increasing inflation.
While such threats always exist, they've generally risen over the last many years.
Market Sections
Despite substantial outperformance of ex-US stocks in 2025,
we’ll again start a year with ex-US (and smaller-cap US) stocks at significantly lower valuations than the S&P 500.
US large-cap stocks remain at serious nosebleed valuations.
There's a good chance the valuation difference between US and ex-US stocks will continue to
decline in 2026. Many experts are looking to emerging markets for outsized gains over the next decade.
Bitcoin and Cryptos
Bitcoin was the biggest investing disappointment in 2025 for many.
It's down YTD, even when denominated in the falling USD currency.
A year ago analysts identified Bitcoin as the most promising investment in 2025,
calling for 100% gains on average. Robert Kyosaki predicted
$350k Bitcoin in 2025. It's uncanny how these gurus consistently make
such poor predictions.
Predictions for 2026 aren't much more muted—the average prediction is for 80-100% gains.
Predictions are shown in the table below, but keep in mind Bitcion preditions are often too optimistic.
| Source | 2026 Target | Implied Return |
|---|
| Mike McGlone (Bloomberg) | $30,000 | -65.95% |
| Binance Users (Consensus) | $92,238 | 4.70% |
| Bitwise | $135,000 | 53.23% |
| Standard Chartered | $150,000 | 70.26% |
| SkyBridge Capital | $150,000 | 70.26% |
| JPMorgan | $170,000 | 92.96% |
| Coinpedia | $200,000 | 127.01% |
| Cryptonews | $203,000 | 130.42% |
| Fundstrat's Tom Lee | $225,000 | 155.39% |
| Bitcoin Rainbow Chart | $400,000 | 354.03% |
| Median | $160,000 | 81.61% |
| Mean | $175,524 | 99.23% |
Some items that may influence Bitcoin and crypto prices are discussed below.
Regulatory Clarity
Despite weak returns in 2025, regulatory clarity in the United States improved markedly.
Ahead of the Trump administration, the industry faced widespread uncertainty as
government actions appeared inconsistent and driven by sentiment rather than policy coherence.
Looking ahead, the Clarity Act is expected to pass in 2026 with bipartisan backing,
paving the way for deeper integration of public blockchains into mainstream financial systems.
This may lift Bitcoin, and could be even more beneficial for smart contract blockchains like Ethereum.
Portfolio Integration
Major U.S. wirehouses are expected to formally open solicited Bitcoin ETF allocations within discretionary
portfolios in 2026, moving beyond the current "self-directed" phase.
At least one major retirement plan provider is predicted to allow Bitcoin allocations (via ETFs) in 2026.
Analysts also anticipate increased participation from pension funds, sovereign wealth funds, and endowments.
Bitcoin Reserves
Multiple U.S. states, including Texas and New Hampshire, have already established or passed legislation for Bitcoin reserves.
Analysts predict at least one nation-state may convert part of its gold reserves into Bitcoin in 2026.
Currency Debasement
Fiat currencies, along with assets denominated in them, face continued pressure due to high and rising public debt.
This should drive demand for alternative stores of value.
Cryptos, specifically Bitcoin, are widely considered scarce digital commodities and alternative monetary assets.
While gold and silver far outshined Bitcoin in 2025, it's not hard to imagine some of this money flowing into
Bitcoin, particularly if other factors spark a rally.
The passing of the silent generation and baby boomers
While not a 2026 event specifically, the flow of money from older to
younger hands may support Bitcoin over the long haul.
In the upcoming decade, about 80 trillion USD will be inherited by the heirs
of the silent generation and baby boomers.
These younger, more computer savvy heirs, are likely to invest more of this money in crypto.
Bonds
Bonds fell short of equities again in 2025, but they finally provided useful returns,
generally above 5%.
Emerging market bonds were the star with the Bloomberg Emerging Markets
USD Aggregate Bond Index pulling double-digit percent gains.
Ex-US bonds in general performed very well.
Analysts generally expect another positive year in 2026,
with returns primarily driven by attractive starting yields rather than large price appreciation.
The consensus forecasts suggest total returns in the range of 3% to 6% for core bond indices,
depending on the path of Federal Reserve interest rate cuts.
Analysts expect the Federal Reserve will continue easing, with the federal funds rate falling to
a range of 3.0%–3.25% by the end of 2026.
This is expected to cause short-term bond yields to fall faster than long-term yields, steepening the yield curve.
Gold and Silver
Gold has had a monster year in 2025 gaining over 70% YTD, after 26% in 2024.
Compare this to predictions last year, which centered around single digit percent gains.
Mining companies and silver fared even better.
One of our uncharacteristic bets in 2025 was in the GDX and GDXJ mining ETFs,
which boosted our portfolio with 170% and 185% returns, respectively!
Gold price predictions for 2026 are provided in the table below.
The mean prediction is for a 5% gain, with a median of about 8%.
This seems surprisingly pessimistic after what happened in 2025,
perhaps a "reversion to the mean" is expected?
| Firm | 2026 Target (USD/ounce) | Implied Return |
|---|
| Citi | 3650 | -18.89% |
| World Gold Council | 4250 | -5.56% |
| Reuters Survey | 4275 | -5.00% |
| Deutsche Bank | 4450 | -1.11% |
| Morgan Stanley | 4800 | 6.67% |
| Goldman Sachs | 4900 | 8.89% |
| UBS | 4900 | 8.89% |
| J.P. Morgan | 5000 | 11.11% |
| Bank of America | 5000 | 11.11% |
| Yardeni Research (Ed Yardeni) | 6000 | 33.33% |
| Median | 4850 | 7.78% |
| Mean | 4722.5 | 4.94% |
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