An overnight military extraction of Venezuela’s leader. Continued record investment in artificial intelligence startups and capital spending in AI. A potential—yet still elusive—peace deal in the Ukraine. That’s all in just the first 10 days of 2026!
Global events thus far in 2026 are showing that it is impossible to predict where the world may go and just as difficult to predict investment performance. According to Morningstar Indexes Strategist Dan Lefkovitz in a recent article—3 Contrarian Investment Ideas for 2026—positioning your portfolio for a range of outcomes is a sensible approach in the face of uncertainty.
- AI exuberance. With the Morningstar Global Next Generation Artificial Intelligence Index up 44.5% in 2025 and off to a strong start in 2026, it might be tempting to put all your investment eggs in the AI basket. However, valuations are high, and the US stock market is increasingly top heavy and concentrated in companies tied to technology. It makes sense to balance your AI exposure with value-oriented and small-cap stocks—neglected areas where prices are more reasonable.
- Global reset. The Morningstar Global Markets ex-US Index rose more than 32% in 2025, nearly 15 percentage points higher than its US equities-focused counterpart, demonstrating the diversification benefits of keeping a portion of one’s investment portfolio outside the US. Historically, geographic leadership has gone in long cycles. In the 1970s, 1980s, and 2000s, international exposure benefitted US investors. Currency diversification is another reason to think globally.
- Fixed income fuel. Relative yields for the Morningstar US High Yield Bond Index and Morningstar LSTA US Leveraged Loan Index at the end of 2025 show the potential benefits of venturing into some riskier fixed income asset classes, but investors should tread with caution. Credit spreads are tight and some tremors have started to appear in the corporate bond market.
Dan Lefkovitz – Strategist, Morningstar Indexes:
“Diversification can mean pursuing contrarian investments if your portfolio is light on them. It’s important to remember that investment leadership is changeable. We could end up seeing a very different investment environment in 2026 than previous years.”
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