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IN THIS ISSUE: Market outlook, money trends, and an investing myth |
GOOD START
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THE HEADLINES
2026 previewWhat’s happening: The S&P 500®1 index was up by double-digit percentages this year, and analysts think that strength could continue into 2026.2
Here’s why: There are a few key drivers. |
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Earnings growth: Even with political turbulence, companies—specifically tech companies like the Magnificent 7—grew strongly in 2025, helping to boost stock prices. Fidelity pros think that could extend to non-tech and smaller companies in 2026.
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Tax and interest rate cuts: New and expanded tax deductions from the new tax law could possibly stimulate spending and the US economy. (Psst … here are some of the ways you may save on taxes as a result of that law.) If the Federal Reserve continues to cut interest rates, US stocks could see gains. That’s because lower borrowing expenses could lead to more money spent helping a company grow.
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The AI boom: Tech stock prices surged this year, fueled by excitement around AI-related profit potential. Fidelity pros think AI is just getting started. While some companies are starting to see returns, the payoff timeline is still unclear. Learn more about how Fidelity’s managers are searching for potential winners amid the AI revolution.
What it means for you:
There are no guarantees when it comes to the market and the economy. Investors should keep an eye on issues like Federal Reserve independence, the weakening dollar, and AI bubble buzz. Barring major surprises, though, the overall economic outlook appears favorable, and near-term recession risks appear low.
Want to get ahead with your 2026 investment plan? Here are 6 top investing ideas that Fidelity pros think will thrive next year and beyond. |
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Reserves judgmentWhat’s happening: More than half of Americans who haven’t retired yet expect to rely on Social Security in retirement, yet more than three-quarters worry they won’t receive those benefits when the time comes, per Bankrate’s recent Social Security survey.3
Here’s why: Earlier this year Social Security trustees issued a report saying Social Security retirement benefit fund reserves—which are partly funded by payroll taxes—are projected to run out in 2033. After that, without action by Congress, the program could afford to pay out 77% of scheduled retirement benefits.4
What it means for you: Social Security’s fate could change
how much you should save for retirement,
as well as other factors, like when you retire. One thing you can do now: Make sure you’re not leaving any money on the table. For instance, if your employer offers a match, check if you’re on track to capture the full amount. Consider vesting schedules too for keeping all of that match—you might lose those dollars if you leave the company before you’re fully vested. Here’s more on how different vesting schedules work.
Find out how much your income and current savings could provide you every month in retirement. These 4 tips could help if you need to ramp up.
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EXPLAINED
4 money trends to watch in 2026Dig deeper into what could be on the horizon next year—and how to react. |
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MONEY LIE DETECTOR
True or false? The stock market is too risky for my retirement money.False. Yes, risk is part of investing, but so is potential reward. In fact, not investing for retirement could be risky because cash may not earn enough in other types of accounts to keep up with inflation. Here’s how a hypothetical $5,000 would have performed when invested at the "worst" possible time.
Consider these other investing advantages too:
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The S&P 500 has risen an average of about 10% each year.5 This year, it’s up about 16% as of December 5.6 Important: Past performance doesn’t guarantee future results.
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If retirement is years or even decades away, you could have time to recover from any market downturns.
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There are strategies to help mitigate risk, such as diversification, or spreading money across many investments instead of putting it all in one stock. (Note: Diversification doesn’t ensure a profit or guarantee against loss.)
Speaking of diversification, you still may want to keep some of your savings in cash and bonds—get Fidelity’s 2026 bond outlook. Watch out for these
6 common stock myths that could derail you from reaching financial goals. |
