Nervous bull
The first few months of 2026 set the scene for an unpredictable and volatile environment. Remarkably, the stock bull market has remained resilient despite the Iranian conflict and the record disruptions to the world’s energy supply, especially oil and gas. Despite the spike in geopolitical uncertainty, the stock bull market is entering its fourth year and reaching new highs.
Investors should recognise that during this volatile period, maintaining exposure to stocks while limiting downside risks remains key. This can be done by hedging and diversifying in the stock market.
Our recommendations
At this point in the business cycle, we advise clients to balance potential positive stock market returns against the ever-present risk of a market correction, via:
- Structured solutions with downside protection
- Currency-hedged US stock funds and ETFs
- Rebalancing of exposure away from US mega-cap stocks towards other regions, and more value and mid-/small-cap exposure
- Positioning in “out-of-favour” regions, sectors and themes
- Defensive sector and low-volatility stock funds and ETFs
- Equity market-focused hedge funds and alternative UCITS funds
- Other asset classes including commodities and other real assets
Key risks
- Current profits may be lower than the markets’ growth if the markets pursue their performance.
- Economic recession could bring this bull market to an end, should the US slowdown prove deeper than expected.
We invite you to go further by reading and watching each investment theme
