January 05, 2026
Dear Investors and Friends,
Each January, markets are flooded with forecasts. Growth, inflation, interest rates, stocks, bonds, all wrapped into neatly packaged “base cases.”
This year is no different. A recent Bloomberg News compilation aggregated outlooks from more than 60 global investment institutions, representing thousands of pages of research and commentary. Distilled down, the consensus view for 2026 looks roughly like this:
The 2026 Consensus Distilled
- Growth: Global and U.S. growth remain resilient, hovering near long-term trend, supported by fiscal stimulus and continued capital spending tied to artificial intelligence.
- Inflation: The worst is behind us, but progress remains slow. Inflation is expected to ease gradually, with risks skewed toward stickier outcomes.
- Monetary Policy: Central banks are expected to lean toward easier policy, though fewer rate cuts than markets currently price. Sticky inflation may constrain how far they can go.
- Fiscal Policy: Government spending remains elevated, driven by political pressures, industrial policy, and national security priorities, raising long-term debt sustainability concerns.
- Equities: Stocks are expected to rise, but at a slower pace given elevated starting valuations. Diversification away from megacaps is widely recommended.
- Bonds: Bonds are viewed primarily as a source of income rather than capital gains, with many expecting a steeper yield curve.
- Credit: Fundamentals appear stable, but spreads are tight. Selectivity is critical, with more risk to widening than tightening.
- Currencies: The U.S. dollar is broadly expected to weaken as monetary policy eases.
- Artificial Intelligence: Massive AI-related capital expenditure continues. Most firms do not yet see a bubble, but acknowledge uncertainty around ultimate returns and productivity gains.
- Risks: Policy mistakes, inflation surprises, AI spending misfires, geopolitical shocks, and trade tensions remain the dominant threats.
That is the base case, reduced from thousands of words to a few dozen.
Why We Don’t Rely on Base Cases
The base case is thoughtful, coherent, and widely shared. And it may prove broadly correct. But if market history has taught us anything, it is that consensus forecasts are reference points, not strategies. The biggest market outcomes rarely come from what everyone already agrees on. They come from what is missed, misjudged, or assumed away.
RCM’s Approach: Risk First
At Roosevelt Capital Management, we are not in the business of predicting the future. We are in the business of managing risk. Our portfolios are not built to depend on any single forecast being right. Instead, we focus on valuation discipline, diversification across the yield curve, careful credit selection, and liquidity, the factors that matter across many possible outcomes.
Whether 2026 unfolds exactly as today’s consensus expects, or looks very different, our objective remains the same: to protect capital, manage risk thoughtfully, and help clients navigate uncertainty with resilient portfolios designed to perform in a wide range of environments.
With gratitude,
David and Mike
Disclaimer
Roosevelt Capital Management LLC is a registered investment adviser. The information presented is for educational purposes only and is not intended to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein.
Past performance is not indicative of future performance. Principal value and investment return will fluctuate. No guarantees or assurances that the target returns will be achieved, or objectives will be met are implied. Future returns may differ significantly from past returns due to many different factors. Investments involve risk and the possibility of loss of principal.
While all the values used in this report were obtained from sources believed to be reliable, all calculations that underly numbers shown in this report believed to be accurate, and all assumptions made in this report believed to be reasonable, Roosevelt Capital Management LLC neither represents nor warrants the values, calculations or assumptions and encourages each prospective investor to conduct their own review of the audits, values, calculations and assumptions.