Congratulations to those of you who have stuck to the investment mantra “time in the market is more important than timing the market”. After a good couple of years for investors in the world equity markets, especially the U.S. market, 2026 has continued to deliver. YTD, global equity market returns nudged further into the teens (MSCI World +13.4%) after a strong August (MSCI World +2.6%). If you have been listening to those experts who have been warning you about the bubble and imminent collapse of the U.S. market due to high debt levels, spiking oil prices, out-of-control inflation or even climate change, you would now be so far behind on your relative returns that you will never catch up, even if there is a correction or two as we can expect every year.
Talking of debt, it is true that the fiscal debt level in the U.S. is very high and that the impact on the U.S. bonds and dollar is very clear to see. For equity investors this is not yet a problem. A weaker dollar means cheaper exports which is good for U.S. companies, and the pain in the bond market is not your problem because you own equities. There might come a time where the yields on bonds are so high that they will offer a good alternative to owning equities, and if for some reason the dollar loses its reserve currency status, equities in the U.S. will deteriorate, but we cannot invest based on “ifs”.
The drivers of your equity returns are still in place. The U.S. consumer is not overindebted and the enormous impact AI is having on the world we live in, is still in its infancy. With all of this said, as prudent investors we have to always evaluate our portfolios. Look at the funds you are invested in and ask the questions regarding those underperformers and also those outperformers. There might be a reason why some of your funds are not performing as well as others, and you might have to make some rotations out of those funds who have done exceptionally well. The secret to successful longer-term investing is to manage your risk as well as your returns. Be patient and don’t try to always chase the best performers but make sure you don’t get stuck in the perpetual underperformers.
