Douglas Boneparth on 2026: Normalization, AI Capex, and Volatility Opportunities

Anticipating Market Normalization in 2026

• 🗓️ The year 2026 is anticipated to be a period of normalization following a year filled with constant headline risks and volatility.
• 💡 While hoping for calm, the speaker acknowledges the uncertainty but expresses a desire for a less turbulent market environment.

Tech Trade and AI Capex Spending

• 🤖 Expectations for the tech sector are set to normalize, moving away from immediate, life-changing AI advancements.
• 💰 Significant capital expenditure (capex) will continue to flow into data centers and chips to support the development of AI.
• 📈 This investment is crucial for realizing the deflationary effects expected from AI, though the timeline might be longer than initially hyped.

Leaning into Volatility as an Opportunity

• 💥 The biggest opportunity for the upcoming year is identified as leaning into volatility rather than focusing on individual stocks or indices.
• 📉 This strategy involves capitalizing on market downturns, such as a potential 20% drawdown in the S&P 500, to buy assets at lower prices.
• 💰 Disciplined investors with available capital can leverage these dips through methods like dollar-cost averaging or pre-defined systems for market entry.

Strategic Investment in Underperforming Sectors

• 📊 For long-term investors, opportunities exist in sectors that have underperformed, such as real estate and oil.
• 💰 It is prudent to reallocate some gains from strong performers (like US and international equities) into these potentially recovering sectors.
• ✅ Investing in assets that are not fundamentally broken, even if they are currently out of favor, can be a sound long-term strategy.