12 Jan 12th January 2026

Index Movement so far in 2026

Welcome to 2026 everyone and I hope it is a profitable and healthy year for all readers.

So, what’s been happening since I took a break from writing to celebrate Christmas.

Well, the Bull Market continues to rumble higher. But we are seeing some rotation. It has not been Big Tech leading the way for the last few weeks. Rather we are seeing traders seek out other sectors like Health Care for profits.

I suspect this will be the theme for the year. The easy money has been made where the rising tide from lower interest rates has lifted all boats. From here on, we need to separate winners from losers in each sector. Individual company earnings will likely be the biggest driver of profits.

That environment should suit our Top 30 Strategy very well. You can read more about that here if you are interested.

Of course the big news has been Mr Trump. And he has been busy.

Firstly he stole oil takers from another country and then invaded and kidnapped their President. Mind you, by all accounts the citizens are quite happy about it.

Venezuela sits on massive resources. Much like Australia. But is very poorly run. Much like Australia.

Why he did it isn’t exactly clear. Yes the resources are there. But it will take a decade to build the infrastructure needed to take advantage of it.

Oil services companies like Schlumberger (SLB) are the way to take advantage of this. I’ll try and put together a list for next week.

Now it would appear Trump will make a move on Iran. Probably with help from Israel.

He also had a big dig at defence contractors like RTX and NOC. He wants them to stop paying dividends and buying back shares and rather use the money on developing new technology and weapons. He also wants to increase defence spending by 50%, which is an increase of $1.5trillion in 2027.

The market decided the increase in spend was far better than losing dividends so defence companies also rose.

It does feel like global conflict is on the up, so there is another sector to add a little exposure to if you also believe this.

His latest move is to attack the Federal Reserve President Powell again. This time with a legal case saying he spent too much money on a new building for the Reserve.

Powell’s term as President will end in May anyway and they will elect someone else. I bet he can’t wait to hang up his boots. The replacement is likely to be a Trump supporter and therefore it increases the chances of further reductions to interest rates. Another positive for Stocks.

Gold pushed higher on this news but it could also because of the increasing military action in the Middle East. I suspect the later is the greater driver.

Just how one man can do so much in twelve days is impressive. Love him or hate him, he is good for stocks as can be seen by the series of new highs the market continues to make week after week.

Final topic for the week.

What do I think will happen in 2026.

Well, that is easy. More gains. The Bull Market continues. Everything is in place for higher prices so why fight it.

Plus, there is this.

I went and grabbed Total Yearly Returns (price + dividends) for the S&P500 index for the last 100 years and then I grouped the yearly returns into brackets.

Here is the result:

Some observations

Risk – There are only 26 years with negative returns. So you have 3 times as much chance of a positive return than a negative return.

I am also not worried about a small loss. I don’t really want to lose more than 10% this year, but if I lose 6 or 7% then I can recover easily and I accept a loss can occur.

There are only 12 years with a loss greater than 10%.

If my measure of success is anything other than a loss of more than 10% then I have an 88% chance of being happy with the result by the end of the year. I like those odds.

In fact, this data says I have a greater chance of making more than 30% than I do of losing more than 10%.

That’s the kind of skew I like and is the reason I am always long (well, nearly always)

There is always something in the news. The data above includes the Great Depression in the 1930s. It includes the recession in the 1970s. It includes the GFC. The Tech wreck. Covid.

Yet still the odds are 88% that I am happy with the result.

It is easy to lose perspective with all the negative news you hear every day. But remember, no matter what, the human desire for profits and improvement is on your side.

Get long. Stay long and wait until the end of the year.

You won’t be sorry.

Reminds me of Mr Spock from Star Trek. He used to say the Vulcan salute.

“Live long and Prosper”

I think my saying for 2026 will be

“Get Long and Prosper”

Warning

Stock values can go down as well as up. It is possible to lose 100% of your investment in a stock. Any advice given by Capital 19 is general advice only and does not take your personal circumstances into account and might not be suitable for you.