Investment themes so far in 2026
With a few notable exceptions, 2026 is looking like 2025 on steroids
The first two months of 2026 are done. With all the noise around AI, recent hand-wringing over private credit and - one month ago - jousting over Greenland and a bond market blow-up in Japan, it’s easy to miss the forest for the trees. So this post does something very simple. It compares how markets did in all of 2025 to how they did in the first two months of 2026. The picture that emerges is very clear. As far as the Dollar and precious metals go, the first two months of 2026 look very much like 2025, except that we’re on steroids. That’s easy to miss because precious metals had such a crazy spike and subsequent sell-off in January, yet they’re still up massively so far this year. The debasement trade is therefore still very much in the driver’s seat, except that it’s being amplified by an even weaker Dollar.
The single biggest difference from 2025 is that the S&P 500 is flat so far this year, which brings to a halt its rise throughout last year. But - strictly speaking - the S&P 500 has been flat since the end of September, so the fact that US equities have run out of steam isn’t something that’s “new” to 2026.
The table above shows how the Dollar, the S&P 500, precious metals and bitcoin have done during all of last year and so far in 2026. For the Dollar, I show it’s performance on a broad basis versus 26 countries as well as against the G10 and emerging markets (EM). The G10 index consists of seven countries, while the EM index consists of 19.
Overall, when you annualize the Dollar fall we’ve seen so far in January and February, we’re essentially on par with last year. The composition of Dollar weakness is shifting though. We’re now getting more Dollar weakness versus EM, while the Dollar is a bit more resilient against the G10. Markets continue to see “debasement” as less of a US-specific phenomenon and more about the G10 overall. That makes sense in my mind, since so many countries are in worse shape than the US when it comes to fiscal policy.
On an annualized basis, the rally in precious metals prices is accelerating in 2026. The crazy spike and subsequent sell-off in January obscure this - as the chart above shows - but precious metals are all up massively in 2025. The debasement trade, of which the rise in precious metals is just one manifestation, looks like it’s picking up speed.
The single biggest difference from 2025 is the fact that the stock market looks like it’s run out of steam, but - technically - the S&P 500 has been flatlining since the start of the fourth quarter, so this really isn’t a new trend. If bitcoin was out of favor as a safe haven in 2025, that’s even more true now. Overall, 2026 looks like a continuation of last year, except that we’re on steroids.
I would reframe a bit - the S&P has run out of steam, but the broader stock market hasn't - in USD, international developed and EM stocks are up double digits YTD, as are small caps and US listed REITs! It's really only US large/mega caps that have stalled, with the bull market broadening elsewhere.
The debasement trade framing holds up well when you look at the data: gold up 65% in 2025, silver and platinum tracking directionally behind it, and the dollar weakening in both G10 and EM dimensions. What makes 2026 interesting is the compression of S&P 500 performance relative to the debasement narrative. If equities were truly repricing for currency debasement, you would expect a tighter correlation between gold strength and equity gains, but the flat S&P in early 2026 suggests something else is happening: multiple compression driven by rate sensitivity and earnings uncertainty rather than a pure debasement trade. The broadening you reference in equal-weight and international indices is the more credible signal, since it suggests the rally is more fundamentally driven and less dependent on a handful of mega-cap names that had been amplifying dollar-denominated index returns.