Michel Dominicé, Senior Partner
2026 opens on a paradox. On one hand, the global economy appears capable of maintaining a “healthy” and relatively stable growth rate. On the other, markets are operating in a political and fiscal environment more unpredictable than ever. For investors, the challenge is therefore not simply to forecast a growth figure or an inflation trajectory: it is above all to understand the economic regime taking shape, and the very concrete implications it carries for asset allocation.
We identify seven themes that should shape portfolio performance this year.
1. Healthy Global Growth and Declining Inflation
According to international organisations such as the IMF, global economic growth is expected to settle around 3.3% in 2026. This pace corresponds to long-term potential and could remain stable. In this context, inflation should continue to ease across most major currencies. In the absence of particular pressure on commodity prices or wages, productivity gains should continue to exert downward pressure on many goods and services.
This scenario points to a relatively stable macroeconomic environment, even if technological shifts,particularly those linked to artificial intelligence,could affect sectors differently. Industries capable of translating these advances into sustainable productivity gains will be especially worth watching.
2. The Risk in 2026 is Political, Not Cyclical
We identify three major sources of risk in financial markets.
The first source of fragility lies in uncontrolled public debt, in a context where governments will need to continue financing large deficits. If debt sustainability were called into question, markets could react sharply, as illustrated by the Greek crisis in 2010. Beyond the technical risk, the real danger would be a crisis of confidence, all the more acute given that parts of the financial and pension systems rest on sovereign debt.
The second source of risk concerns political pressure on central banks, particularly in the United States. Premature monetary easing could trigger a depreciation of the dollar and reignite inflation, to the detriment of monetary stability and credibility.
Finally, the chaotic use of tariffs as a political instrument by President Trump represents an additional risk, liable to disrupt trade flows, value chains, and corporate visibility. Such dynamics could revive inflationary pressures, increase market volatility, and potentially force the central bank into a more restrictive stance.
To these must be added geopolitical risks, the evolution of which remains largely unpredictable. In this context, the challenge is not to anticipate them precisely, but to prepare for them through adequate diversification.
In conclusion, these risks do not necessarily undermine the central scenario, but they increase the probability of episodes of volatility and dispersion across markets.
3. The Knowledge Economy Imposes a New Regime
Technological progress, particularly in the knowledge economy, is driving a significant transformation of the economy. From an industrial capitalism dominated by fixed capital investment, the world is transitioning towards a knowledge economy where intangible capital is becoming predominant.
The effects of this transformation are manifold. For investors, seven shifts stand out as particularly important:
- Collapse of marginal costs in the production of services and industrial goods
- Rising margins at major corporations
- Lower interest rates, lower returns on capital, and historically elevated valuations for real assets
- Increased uncertainty driven by technological change
- Reduced amplitude of economic cycles
- Growing income inequality and associated political tensions
- Sometimes dramatic declines in birth rates
Among these shifts, rising margins, lower interest rates, and increased instability of business models appear particularly structural for investors.
These developments do not merely alter the growth trajectory: they change the structure of expected returns, the stability of business models, and the role of major asset classes within a portfolio.
4. Equities Will Remain the Dominant Asset, but Selection and Diversification Will Make the Difference
More complex stock selection and growing instability of business models argue for rigorous portfolio diversification. We favour companies with strong innovation capabilities and flexibility, able to consolidate a dominant position within their sector.
In this framework, we anticipate that even at elevated valuations, equity markets should continue to rise. Continued growth in corporate earnings should fuel this positive dynamic, supported by a moderate decline in interest rates across major currencies, notably the dollar and the euro.
Our proprietary analysis of equity market seasonality suggests that a catch-up phenomenon could materialise in the first part of the year, benefiting more cyclical stocks, smaller capitalisations, and markets outside the United States.
5. Bonds Must Be Rethought: the Fixed Income Allocation Must Evolve
Low interest rates, significant fiscal imbalances coupled with declining birth rates in developed economies pose a threat to monetary policy and to bonds. In this context, the portion of portfolios traditionally allocated to fixed income must evolve towards solutions capable of generating more consistent performance with lower correlation to equity markets.
Certain alternative asset classes — such as real estate, catastrophe bonds (cat bonds), commodities, or certain alternative management strategies — can, depending on market conditions, contribute to this diversification and offer differentiated return profiles.
Read also: Are negative interest rate back on the horizon in Switzerland? | Dominicé
6. Real Estate is to be Favoured, but Location Will Be Decisive
Swiss real estate is a sector to favour. Social polarisation is also driving regional polarisation: it is therefore important to target regions with superior growth prospects, even if this translates into lower rental yields in the short term. These regions often benefit from an initial geographical advantage — accessibility, infrastructure, quality of life — to which is added an emulation effect specific to the knowledge economy, where the concentration of talent and elites further reinforces their attractiveness.
Read also: What’s in store for Swiss securitized real estate in 2026? | Dominicé
7. Switzerland: The Return of Negative Rates Remains a Credible Scenario
The Swiss franc should remain under upward pressure. The dollar has remained relatively stable for ten years, trading between 90 and 95 centimes against the franc, even as the United States experienced significantly higher inflation than Switzerland. This cumulative divergence has not yet been reflected in the exchange rate, which argues for a continued decline in the dollar, potentially towards 70 centimes.
Read also: How to Respond to a Weak Dollar | Dominicé
In this context, we see the risk that the SNB could be forced to return to negative interest rates. We were among the first to raise this scenario as early as 2023 and continue to believe in it: an environment of very low or even negative rates could persist and exert additional pressure on the domestic real estate market.
Navigating Dispersion
In 2026, the challenge is not to predict a single scenario, but to navigate a more fragmented market: more prominent political and fiscal risks, more disruptive innovation, greater dispersion. In this context, performance will come less from a macro bet than from disciplined portfolio construction: genuine diversification, rigorous selection, and allocations adapted to the new equilibria.
