What you can expect from Delta's investment strategy in 2026
Here are some thoughts on how we at Delta Wealth Management are looking at the 2026 investment landscape for our clients.
Our 2026 thoughts on equities
While the Federal Reserve kept to their promise of lowering interest rates, this upcoming year will present us with new and ongoing challenges that have us concerned.
From enacting weekly tariff changes to extraditing political leaders by force, the current administration continues to be unpredictable. We believe macroeconomic risks around the world are increasing. Corporate executives do not like unpredictable politicians.
The Magnificent 7* tech stocks accounted for a disproportionate part of the total market gains. Narrowing market leadership is a historical indicator of a peak rather than a sustained rally.
The next chapter of artificial intelligence remains cloudy because we are not certain that companies will continue to invest at the same rate they did last year. Additionally, we need to address whether widespread AI implementation will lead to an increase in unemployment. We expect companies incorporating AI to prosper while others that do not change and adapt will see a meaningful reduction in their market value.
Finally, inflation remains persistent, despite what the administration claims.
Our equity management plan for 2026 will include the following:
We will remain invested in equities because time in the market beats timing the market.
We will increase our clients’ holdings in cash because the current equity market is overvalued.
We will diversify clients’ portfolios away from overconcentrations in technology.
Our 2026 thoughts on bonds
Over the previous 15 months, the Fed cut interest rates by 175 basis points. The important message from the December meeting was that the Fed is trying to slow expectations for additional near-term rate cuts. That bodes well for the municipal market, and we believe municipal yields will remain range bound.
In 2026, we expect municipal bonds to offer attractive after-tax yields making them an attractive investment choice. Bond issuance is anticipated to reach another record year in 2026 fueled by infrastructure needs, such as roads, bridges, utilities, and data centers.
We believe investor demand will be strong due to attractive municipal bond yields, the ongoing increase in separately managed accounts for high-net-worth individuals, and the potential diversification benefits of the municipal bonds if stock market volatility increases.
Our investment plan for 2026 will incorporate these themes:
We believe that compounding tax-free income is a proven method to increase wealth.
We expect municipal bonds to offer attractive after-tax yields.
We will continue to invest in infrastructure projects such as toll roads, utilities, and airports.
If you have any questions about how we accomplish our investment objectives, please feel free to reach out.
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*The Magnificent 7 (a.k.a. Mag 7) stocks are Alphabet (GOOGL; GOOG), Amazon (AMZN), Apple (AAPL), Meta (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA).