Advisors See Double-Digit Equity Gains in 2026 — With a Bumpy Ride
Most advisors expect stocks to grind higher but not without turbulence in 2026. According to the Fall 2025 InspereX Pulse Survey of 856 financial advisors, 60% believe the S&P 500 will be at least 10% higher by the end of 2026 versus its early November range of 6,720–6,851, while 18% see a 10% or greater decline and 22% expect flat returns. More than half (54%) say equities will be the top-performing asset class next year, well ahead of bonds/fixed income (12%) and alternatives (10%).
That optimism is tempered by expectations for choppier trading. Nearly half of advisors (48%) cite cryptocurrencies as the most volatile asset class in 2026, followed by equities (31%) and commodities (6%). An overwhelming 91% expect at least a 10% market drawdown at some point next year, including 34% who see a 15% drop and nearly 30% who anticipate a 20% or larger decline; only 9% do not foresee a major pullback. In response, 81% say they will probably or definitely add more protection strategies to client portfolios.
The Fed looms large in those plans. Two-thirds of advisors (66%) expect two to three rate cuts in 2026, while 21% see a single cut and just 3% foresee four or more; 8% expect no change and 2% anticipate at least one hike. To combat the drag from lower yields, 81% are preparing to, or already have, discussed adding more risk to client portfolios to meet return targets, with half aiming for 6–8% annual returns and more than a third targeting above 8%.
Advisors and their clients share a similar “wall of worry,” led by geopolitics, volatility, inflation, and recession risk. Yet three in four advisors say volatility creates opportunities to demonstrate value, and nearly as many say it deepens client engagement—critical at a time when average client anxiety scores have ticked up to 5.6 on a 10-point scale from 5.1 a year earlier.
“Advisors are cautiously optimistic about market returns in 2026, but expect a high degree of market volatility along the way, with some even bracing for a potential U.S. recession,” said Chris Mee, Managing Director of InspereX.