Market insights for 2026: Trends, risks, and opportunities

What investors should keep in mind as markets shift and how to stay focused on long term goals

Periods of global uncertainty can naturally lead investors to pause and ask questions about what comes next. Geopolitical tensions, trade disputes, and political unpredictability can create short-term market swings, but they do not change the importance of long-term planning.

As we move into 2026, many members are looking for context and clarity. To help explain what recent market performance may mean and how different investment approaches work, we spoke with Chan Huynh, Senior Wealth Advisor at SCU and Aviso Wealth.


What does a strong market year mean in practical terms?

In 2025, Canada’s main stock market index, the S&P/TSX, gained nearly 30 per cent. An index like the S&P/TSX tracks the performance of many large Canadian companies, so a strong year generally reflects broad market growth rather than the experience of any single investor.

Strong returns can support long-term goals, but they can also raise questions about risk and sustainability. During uncertain periods, some investors look for companies with established operations and predictable cash flow. With that context, Chan points to dividend-paying companies as an area investors often seek to understand better. With the potential volatility that comes with geopolitical uncertainty, Chan says it’s hard to argue against investing in dividend-paying stocks.

Dividend-paying stocks are shares of companies that distribute part of their profits to shareholders, typically on a regular schedule. Dividends can provide income regardless of short-term changes in share price, which some investors find reassuring. “It doesn’t have to be more complicated than owning great businesses with a long track record of not only paying a dividend but increasing their dividends, no matter what’s going on in the global economy,” he explains.

In Canada, large financial institutions are often cited as examples of businesses with multiple revenue streams. This diversification can help balance performance over time. “The retail side does well when times are good, as confident clients take out mortgages and other loans,” Chan says. “When times aren’t as good, it can bring in additional credit card revenue when people carry balances.”

Different business lines can perform well under different economic conditions, which can support more consistent results. “Over time, about 40 per cent of your total return on investment comes from dividends,” Chan notes. “If you had invested in Canadian banks and held onto those stocks, you would have done phenomenally well over many years.” Dividends can also influence how investors think about risk and return. “With companies that don’t pay a dividend, investors are relying purely on share price appreciation for their return.”


What about selling when markets are high?

After a strong market year, some investors wonder whether they should scale back their holdings in equities—shares that represent ownership in a company and can rise or fall in value over time. Instead of reacting to short term market movements, Chan encourages investors to look deeper and understand the fundamental factors driving those results. “As long as companies continue to make money and hit their earnings-per-share numbers on a quarterly basis, share prices should continue to go up,” Chan says. Earnings per share is a measure of a company’s profitability. Consistent earnings growth has historically supported long-term market returns. For investors with longer timelines, “it’s really about time in the market and the benefits of letting things compound,” Chan advises. 

Chan also points to past events as reminders of how quickly markets can move. “If you think back to early 2025, and ‘Liberation Day,’ when President Trump announced widespread tariffs on U.S. trading partners, the S&P 500 fell 12 per cent in just a few days. Investors who got spooked and sold locked in their losses.”
Markets later recovered.

“If you had hidden under a rock, you’d have been fine — and up significantly,” he says.

Experiences like these often highlight the value of having guidance during periods of stress.
“That’s when you can really appreciate the value of an advisor who can guide you through a tumultuous time to help you avoid costly mistakes.”


How does artificial intelligence fit into today’s market?

Artificial intelligence continues to be a focus of discussion, though not without questions. Chan says some investors remain cautious due to valuations. “Valuations are a little lofty, and some people are concerned it could be a replay of the tech bubble in 1999.” Valuation refers to how a company’s market price compares to its earnings or expected growth. Higher valuations can increase sensitivity to changes in expectations.

Chan also notes that leadership within markets tends to change over time. “We’re seeing a rotation out of technology and into other areas, such as base metals and industrials, sectors that haven’t performed as strongly over the past couple of years but are starting to gain traction. ”Large technology firms are continuing to invest heavily in infrastructure. “Companies like Amazon, Google, and Microsoft are spending a tremendous amount of money building data centres around the world.” Those investments are being closely watched. “The investment community wants to see a return on that spending,” he says. “If those returns don’t materialize, it could put pressure on share prices.”


Which is a better investment right now: stocks or bonds?

The choice of investment types really depends on your situation, because the best mix of investments often comes down to interest rates, how fast companies are growing, and your personal goals.

Stocks (equities) are investments that give you part-ownership in a company. Bonds (fixed income) are loans you make to a government or company in exchange for steady interest payments. Right now, because interest rates are still relatively low, bonds aren’t paying as much as they could in a higher rate environment. “Our portfolio managers currently hold more equities than fixed income investments, largely because interest rates remain relatively low,“ Chan explains.
 
The Bank of Canada recently kept its key interest rate at 2.25%, and experts expect rates to stay about the same through 2026. When rates stay low, stocks often remain attractive—especially when companies are reporting strong growth. For example, one major Canadian bank saw its earnings per share rise 27% year over year, showing that company profits continue to support the stock market.


Staying focused through uncertainty

Market uncertainty is a normal part of investing. Understanding how different investments work, and how they fit within your overall plan, can help keep decisions grounded in long-term goals rather than short-term noise.
An SCU wealth advisor can help members review their portfolio, discuss market developments, and ensure their strategy continues to reflect their life stage, priorities, and comfort level.

Book a meeting with an SCU wealth advisor with Aviso Wealth to make sure your investment strategy is working for you.