It's nearing the end of the year, and most of us are looking at 2026 with great anticipation -- wondering what it will bring for our personal, professional, and financial lives. Regarding our financial lives, many wonder what the stock market will do -- and, therefore, how our portfolios will fare.
Here's a look at the question -- and some answers -- along with some general investing advice for the year ahead, and beyond.
Image source: Getty Images.
The experts say...
As you wonder what 2026 will bring, you may find yourself seeking out expert opinions, assuming they know better than we do about economic conditions and prospects.
Unfortunately, though, despite many Wall Streeters' extensive financial educations and vast experience, they often disagree. (Even if they agreed, they could be wrong!)
Here are some perspectives and predictions from a range of financial experts:
Bank of America
The S&P 500 (^GSPC 1.10%) index of 500 of America's biggest companies was recently at 6,900. Bank of America analysts recently projected that the S&P 500 will gain about 3% from that level, hitting 7,100.
Morgan Stanley
Morgan Stanley analysts are more bullish, predicting a 13% rise to around 7,800 for the S&P 500, largely due to robust corporate earnings.
The Motley Fool's Matt Frankel
My colleagues also have opinions about what to expect in the coming year. Matt Frankel, for example, is predicting "the return of 5% mortgage rates and massive outperformance from small-cap stocks in 2026."
Deutsche Bank
Deutsche Bank analysts are expecting a jump of around 16% in 2026, moving the S&P 500 to 8,000. They cite expected earnings growth, along with higher dividend payout ratios and below-average inflation.
Consensus
Among 13 Wall Street firms that have issued predictions, the average projected gain for the S&P 500 is about 10.5%, which would put the S&P 500 near 7,600. Interestingly, all 13 predicted a gain for the market, with none expecting a drop.
Putting predictions in perspective
Seeing the range of opinions makes it clear that experts don't fully agree. They are all bullish, though. Warren Buffett has quipped that "the future is never clear; you pay a very high price in the stock market for a cheery consensus." With that statement, he's suggesting that those who simply accept rosy predictions and act on them can end up losing money.
Buffett also likes to quote his mentor Benjamin Graham on the topic: "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." In other words, stocks can move up or down on popularity in the short run, but over the long run, their results will be tied to their business performance, such as their profitability.
It's best to regard all predictions as simply guesses. After all, no one can consistently correctly predict the stock market's near-term moves.
You might keep the average in mind: The long-term annual average return of the S&P 500 is around 10%, excluding inflation. While it can be reasonable to hope for an average annual gain of 10% in the stock market, any given period might feature a higher or lower average annual gain -- and note this, too: Few years offer average returns!
Check out some historical numbers:
|
Year |
S&P 500 Return |
|---|---|
|
2007 |
5.49% |
|
2008 |
(37%) |
|
2009 |
26.5% |
|
2010 |
15.1% |
|
2011 |
2.1% |
|
2012 |
16% |
|
2013 |
32.4% |
|
2014 |
13.7% |
|
2015 |
1.4% |
|
2016 |
12% |
|
2017 |
21.8% |
|
2018 |
(4.4%) |
|
2019 |
31.5% |
|
2020 |
18.4% |
|
2021 |
28.7% |
|
2022 |
(18.11%) |
|
2023 |
26.29% |
|
2024 |
25.02% |
|
2025* |
18.77% |
Data source: Slickcharts.com. Returns reflect reinvested dividends.
*Year to date as of mid-December 2025.
You can see how hard it would be to predict anything, when the stock market offers such a hodgepodge of annual returns. Look at the period between 2009 and 2016, featuring eight years of big gains -- six of them in double-digits. You might have reasonably expected a down year somewhere in there, or you might have thought that surely, 2017 will be a down year. But no -- the S&P 500 gained nearly 22% that year!
What should you do?
If you're feeling very nervous about a possible stock market correction or crash, you might move some of your money out of stocks. (You should actually not have any money you expect to need within five, if not 10, years in stocks, anyway.) But do understand that the stock market is simply volatile, and crashes and corrections will happen now and then. The stock market has always recovered from them, though, usually (but not always) quickly, going on to set new record highs.
Consider taking a lot of the guesswork out of your investing, too, by just investing in one or more simple index funds, such as one that tracks the S&P 500. That can be all you need to build long-term wealth.
Don't focus too much on 2026, either. What really matters is where the stock market is in 2036 or 2046 or 2056 -- the years when you might be selling some stocks to help support you in retirement or to pay for other needs.
