As we head into 2026, investors are asking some big questions: Has the AI boom gone too far? Are markets properly pricing in policy uncertainty? And can strength outside the U.S. continue to hold? Capital Group believes the market is entering a new phase, one defined by broader leadership and a wider opportunity set beyond U.S. mega-cap tech. Here is more about what they have to say:
“We are moving from a binary market environment in which U.S. tech stocks dominated returns to a more balanced one with a broadening opportunity set,” explains Martin Romo, chair and chief investment officer of Capital Group.
“This environment requires balance. That means investing in U.S. and non-U.S. stocks, growth and value, cyclical and secular trends. I believe the importance of active stock selection, supported by deep research, has never been clearer,” Romo adds. Here are three key investment strategies that we believe will generate compelling opportunities in the year ahead:
1. Tap into dynamic growth potential
Tech giants have invested in AI infrastructure at a mind-boggling pace in a race for supremacy. Along the way, their share prices — and investor enthusiasm — have soared. The AI boom has also triggered a growing number of news reports questioning whether it has reached bubble territory. Some have even drawn comparisons to the dot-com bubble of the late 1990s.
2. Diversify portfolios with international investments
New catalysts for growth across Asia and Europe are showing that the strength of the U.S. economy and stock market doesn’t mean exclusivity, as other nations also are pursuing productivity gains.
3. Defend against volatility with dividends
Investors concerned about the volatility that can be associated with highly valued technology stocks would do well to remember the important role dividend-paying stocks can play in a diversified portfolio. They have historically been resilient during market declines but have generated positive returns when markets have advanced.
It’s no longer a matter of choosing between U.S. and international or growth and value — it is important to embrace both, but selectively. The market volatility in April 2025 after the U.S. announced widespread tariffs serves as a fresh reminder of the importance of maintaining balanced, well-diversified portfolios.”
For the full article from the Capital Group click here. Interested in how to make sure your portfolio is well diversified, schedule your free consultation with us.
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