Matt Powers: 2026 Market Outlook and Investment Strategies

2025 Market Performance Recap

• 📈 The market has had a strong 2025, with the S&P 500 reaching 39 all-time highs and all 11 sectors turning positive.
• 📉 Rates have decreased, and the VIX is below 14, indicating a favorable market environment.
• 💡 The primary driver of the 2025 market was earnings, not macroeconomic factors.

2026 Market Outlook

• 🎯 2026 is set up to be a pretty good year, though returns may moderate compared to previous years.
• 🔄 A rotation in leadership is expected, as seen in over 80% of previous bull market fourth years.
• ⚠️ Volatility is likely to increase in 2026.

Investment Themes for 2026

• 💰 The focus is shifting from rewarding spenders in AI to companies demonstrating profitability and productivity.
• 🌱 Powers Advisory Group favors dividend growth stocks with a history of increasing payouts.
• 💻 Within tech, interest lies in companies that can still benefit from AI, such as cyber security and software firms.

Specific Investment Areas

• 🔒 Cyber security is highlighted as a critical area, no longer a luxury due to increased data access and AI risks.
• 📊 Companies like Palo Alto Networks (PNW) are mentioned as leaders in cyber security that may benefit from AI integration.
• 📈 The