Financial experts are offering their insights into the market outlook for 2026, suggesting that while there is potential for growth, investors should prepare for significant fluctuations. Ryan Detrick, Chief Market Strategist at Carson Group, anticipates that portfolios could see an increase of 12 to 15 percent this year. However, he warns that the journey to this growth may encounter turbulence.
During an interview with TheStreet, Detrick highlighted the historical context of market performance, particularly as the United States navigates the second year of President Donald Trump”s administration. Traditionally, the first and fourth years of a presidential term are characterized by robust market activity, driven by campaign promises and legislative initiatives that often stimulate investor enthusiasm. In contrast, the second year tends to present a different scenario.
Jeffrey Hirsch, writing in the 2026 Stock Trader”s Almanac, elaborates on the historical patterns associated with presidential tenures. He notes that the second year often brings challenges that can lead to market downturns. According to Detrick”s analysis, data spanning back to 1950 indicates that the average decline during the second year of a presidency is approximately 17.5 percent, contrasting sharply with the smaller declines observed in the first, third, and fourth years, which range from 11.2 to 12.9 percent.
Historical records show that out of nineteen midterm years since 1950, six experienced bear markets with drops exceeding 20 percent. For instance, the market saw a decline of 33.8 percent in 2002 and 25.4 percent in 2022. These statistics underscore the potential for turbulence in the current political climate, which is further complicated by the contentious nature of Trump”s presidency and the uncertainty surrounding the midterm elections.
Despite the impending challenges, seasoned analysts like Todd Campbell suggest that such selloffs can create significant buying opportunities for astute investors. Historical data indicates that after experiencing declines in midterm years, the S&P 500 has rebounded with an average return of 31.7 percent in the following year. Detrick emphasizes that “a year off those lows has never seen stocks lower,” reinforcing the notion that downturns can lead to future gains.
Hirsch supports this perspective, stating that “where there is great danger, there is also great opportunity.” His forecast anticipates a difficult second and third quarter, with a recovery expected in the fourth quarter, possibly leading to an overall gain of 4 to 8 percent for the year. Drawing from his extensive experience, Campbell notes that the stock market can fluctuate more dramatically than many anticipate, and that investors should remain focused on their long-term financial strategies, even amidst volatility.
Detrick”s advice for those faced with market downturns is to view these moments as sales rather than reasons to panic. “The stock market is the only place where things go on sale, and everyone runs out of their store screaming,” he remarked, encouraging investors to stick to their investment plans even when faced with red numbers on their portfolios.
