Where is this stock market going in 2026? (My opinion)

So where's the stock market going in 2026? Inevitably, in my one-on-one client meetings, I get asked the question, where do you think this is going in the short term? What should we do about this? So I'll tell you what I've been telling them, and not only that, I'll clue you in on how I'm going to be investing, because I do think that we're gonna be hitting a perfect storm in the next couple of months, and many are not ready for it. My name's Nolan Govea, my students call me Professor G, and I made this channel to make investing simplified. Remember that all investing carries risks, so do your own research. This is not financial advice, and I'm not a financial advisor. All right, so we have to start with this AI bubble. The AI bubble is now 17 times the size of the internet companies at the peak of the dot-com bubble. In this article that was pretty well-written, called AI is the Bubble to Burst Them All, the author Brian Merchant did some good research on other bubbles. A big takeaway was this one. It's worth reiterating that two of the closest analogs AI seems to have in tech bubble history are aviation and broadcast radio. Both were wrapped in high degrees of uncertainty, and both were hyped with incredibly powerful coordinating narratives. Both were seized on by pure play companies seeking to capitalize on the new game-changing tech, and both were accessible to the retail investors of the day. Both helped inflate a bubble so big that when it burst in 1929, it left us with the Great Depression. Obviously, that's the most bearish of situations, but we do have to keep that in mind. We also have to look at the soft jobs market. Not only are jobs not growing, but unemployment has been rising, and those numbers have been incredibly scary. We do have to keep an eye on that. Without job growth, consumer spending would sharply contract, making any economic slowdown much worse. If labor weakness materializes, the S&P 500 could fall 500 to 700 points initially, with deeper losses if a full contraction occurs. Defensive sectors, such as staples, utilities, and healthcare should outperform, alongside lower-volatility ETFs and mega-cap tech, as long as the AI story is still intact. So it's interesting there they're saying that specifically defensive or value-style ETFs, ones that are probably boring, don't have much tech exposure, those are the ones to hold in that will probably outperform in that case. But they're also saying that mega-cap AI, the ones with Nvidia and Google and Amazon and Meta, and ones that have heavy AI because of the AI story and all that hype that goes along with it. So it's interesting that they're talking about two different sides of the spectrum there. Bottom line, the labor market is not bad. However, it's losing momentum, and this is something we need to watch carefully. The other thing that's adding to this perfect storm is those rate cuts, and not just the rate cuts or what they're doing to us month to month, but the idea that this could lead to heavy inflation. We just had two rate cuts in a row in the past two months, and we're probably gonna see another one by the end of this year and a bunch throughout 2026. This should provide a shot in the arm to spending throughout because money will be cheaper to borrow and thus easier to spend. In the October meeting that just happened, the Fed chair did say that they're going to end quantitative tightening, which means that they're going to stop restricting money and it's going to be easier to borrow, and eventually they're going to probably have quantitative easing, which is not the best thing long-term. At short-term, it will be better that we're gonna see a lot more money in the economy. Long-term, we're gonna see heavy, heavy, massive inflation. This is money printing. This will be bad. Along with all this that I've gone over so far is also geopolitical tensions and trade war with the tariff conversations. So how is this market going to do and what should we expect? The biggest stories do surround AI, and we all know and we're seeing that AI is definitely reshaping the job market. A lot of workers worldwide fear unemployment because of AI and technology, but the real issue is that people are still living in a bubble. They still think they won't get affected until it hits them like a truck. So I want you to make a smart choice for this Black Friday, and while most people are spending on things that are gonna lose value, the smart ones are investing in what's gonna shape the future, which is why I wanna thank Outskill for sponsoring this video. They're hosting a two-day live AI mastermind workshop this Saturday and Sunday from 10 a.m. to 7 p.m. Eastern. 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Okay, so the main idea here is how can we set up our portfolios for the best chance of success no matter what happens in the short-term or long-term? Many analysts and just wise investors in general who have been doing this for 50 years see the writing on the wall specifically with AI and technology. Moving towards safety is smart, not necessarily out of equities, just lowering the exposure to tech and AI. Vanguard recently put out their projections for the next 10 years, and it's very interesting. They said that out of all U.S. equities, it won't be growth or even U.S. large cap that will be the best. The one they think will outperform the rest is actually U.S. value. They think between 5% to 7% appreciation on average for U.S. value as compared to only 1% to 3% for U.S. growth per year. I don't think as bearish as Vanguard, but I do believe that value will make up much ground in these next couple of years. I think it's been all about high-flying tech, and I'm not saying that tech's going to crash or anything, but I do think there is a point where it stalls out. It's been so high for so long that I think that value catches up, gets some ground, and it would be a smart idea to balance the portfolio just so that you don't have as many crazy volatility. For international, Vanguard thinks it'll outperform a lot of U.S. equities as well. This comes from the dollar devaluation happening this year and the fact that this year, international has been outperforming. One of the most famous international ETFs is VXUS, and this year to date, it's up 28.35%. VU or the S&P 500 is up 17.53%, which isn't bad at all, but comparatively, international's beating the U.S. equities so far this year. So for very conservative and very much diversified portfolios, getting out of tech primarily, not fully, but somewhat, moving into some value, moving into some international possibly, but then also I really, really like solid assets that have shown a good track record and that have been around and have been tested by time, specifically real estate and commodities like gold. I also really like Bitcoin in this category, but the idea is just to buy assets that will appreciate while the dollar is dropping in value or loses value to inflation, which absolutely is going to happen, just like I talked about at the beginning of this video, with them turning the money printer right back on. Now of the three, I'd temper expectations with gold specifically. Now, long-term, if you're gonna be holding gold for the next 15, 20 years, I don't think there's any issue. What I would just caution is we just had one of the best years of gold ever. This is the absolute top. And so if you invest right now, if you hold some gold right now, you have to expect somewhat of a pullback or at the very least to stall out for a couple of years. Gold traditionally has not been something that you buy in order to get rich. It's more so there to preserve your wealth. And it's a very solid asset class, something that a lot of my more wealthy clients definitely hold, and it's stood the test of time, but I'm just saying temper your expectations with this one. I do believe that with real estate specifically, we may see some interesting increases, especially as inflation goes up and as those rates come down, we're gonna start to see a lot more demand in the housing market, and that's gonna push prices right back up. Real estate, very solid in my opinion. With all this info, what am I doing personally? Well, me personally, I'm gonna be staying very consistent with what I've told you guys throughout the years on this channel. The whole reason why I came up with my three fund portfolio is to do well in all market conditions. That's why I'm not fully in tech when everybody else is. I stay very, very balanced because I know that at some point, tech is not gonna be the hot ticket. I know that's hard to understand or even conceptualize, but I've been around long enough and I have clients who have been doing it for twice as long as I've been alive, and they can definitely vouch for that. There's going to be short-term volatility no matter what, and I'm okay with that. I understand my risk profile. I also have some cash off to the side just in case, but that's why I diversify into multiple asset classes. That's why I have rental properties. That's why I do have some Bitcoin, and that's why I have been investing in different types of ETFs. For right now, I am definitely pulling the brakes a little bit on the tech sector. I'm still investing somewhat in SCHG and QQQM, but I'm very much investing fully into those value ETFs, value-type stocks like Berkshire Hathaway, and then always very heavy into the S&P 500. To keep you going strong on investing, watch either of these videos, and remember to keep investing simplified.