How CommSec clients are positioning for 2026

Interview recorded on the 10th of December 2025

If 2025 reminded investors of anything, it’s that markets still have a knack for keeping us humble. The year delivered everything from record highs in February to a sharp slide into bear-market territory by April, before staging a powerful rebound into the final quarter. It was a lesson in how quickly sentiment can swing and how rewarding it can be to hold your nerve when it does.

CommSec Market Analyst Steven Daghlian summed it up when we sat down to discuss the Outlook for 2026.

“Just be patient, don't get too caught up in the headlines, because it's very easy to do," he says.

It’s advice that rarely goes out of style, but 2025 reinforced its value. Investors who stayed the course through the April sell-off were rewarded handsomely, with the ASX 200 rallying 30% from its trough to October’s record highs. The S&P 500 climbed 40% over the same stretch, while the NASDAQ surged 60%. 

As Steven pointed out, the year was also a timely reminder that predictions, no matter how carefully constructed, always come with margin for error. 

“You’ve got to take any outlook with a gigantic grain of salt,” he says. 

Volatility isn’t a bug in the system, it’s part of how markets function. That makes the real value of an outlook less about calling the exact number on an index and more about understanding the forces that will shape the path ahead. With that in mind, here are the four themes Steven believes deserve the closest attention as we move into 2026.

1. Interest rates and earnings expectations

After a year dominated by rate-cut debates, 2026 looks more like a test of expectations. In the US, the market is still pricing in modest cuts, but inflation remains sticky and the Fed’s leadership transition in May adds uncertainty.

In Australia, the tone has shifted more decisively. The Reserve Bank has pushed back against near-term cuts, and the next inflation print on 28 looms as a key swing factor. For investors, the focus increasingly shifts from policy itself to how companies perform in a higher-for-longer environment.

“Valuations are already quite stretched… earnings growth is going to be critical," says Daghlian.

Investors should expect earnings season to pack more punch than usual next year.

2. Big Tech’s influence 

AI remains the defining theme, but so does concentration risk. The top 10 stocks now account for around 35–40% of the S&P 500, a far higher share than a decade ago. NVIDIA alone is worth more than twice the entire Australian sharemarket.

Massive capital spending commitments from companies like Microsoft, Amazon and Meta mean earnings updates will matter more than narratives. Even small disappointments could have outsized effects on index performance.

“If they disappoint, it could be a rough start to the year for some of these big names," he says.

3. Geopolitics: Tariffs, elections and central bank independence

Tariffs, trade and politics have slipped from the headlines but they haven’t disappeared. The US–China truce remains fragile, and US midterm elections in November could inject bouts of volatility.

These events are hard to predict and easy to overreact to. For long-term investors, the challenge is recognising noise without ignoring genuine risks.

4. Sector opportunities on the ASX

For Australian investors, markets still turn on banks and miners — together around 55% of the ASX. Resources enter 2026 with momentum: gold stocks doubled in 2025, copper hit record highs and lithium prices showed signs of recovery. Even iron ore held up better than feared.

Banks face a more mixed outlook. A pause in rate cuts may support margins, but the risk of higher rates could weigh on housing and sentiment. Healthcare and tech, after underperforming in 2025, may offer selective opportunities if earnings confidence returns.

How CommSec clients are positioning for 2026

Beyond forecasts, investor behaviour offers another useful lens. CommSec data provides a snapshot of how Australians are thinking about the year ahead.

Watchlists reveal where curiosity is building. DroneShield topped the list in late 2025, reflecting both its extraordinary run-up and subsequent pullback. Lithium producer Pilbara Minerals also featured heavily as prices recovered and deficit expectations resurfaced. CSL’s inclusion suggests investors are watching closely for signs of a turnaround after a tough period.

Actual portfolio holdings tell a more stable story. The major banks, BHP, Woodside, Wesfarmers and Telstra remain core positions, alongside CSL. On the ETF side, Australian equity exposure via the Vanguard Australian Shares Index ETF (VAS) sits alongside global and US funds such as the iShares S&P 500 ETF (IVV) and Betashares Nasdaq 100 ETF (NDQ).

Investors are actively scanning for new opportunities, but when it comes to capital, they continue to anchor portfolios around scale, liquidity and diversification.

History doesn't repeat but it does rhyme

For all the noise that fills a year like 2025, Steven’s reminder about long-term returns is a useful anchor. Over the past two to three decades, the S&P 500 has delivered annual gains of around 10–11%, while the ASX 200 has returned roughly 8–9%. 

Those numbers aren’t achieved in a straight line - they’re built through stretches of volatility, sentiment swings, and the occasional conviction testing shock. But they also show why staying invested, staying patient, and focusing on the underlying forces that drive markets has paid off over time. 

And that’s the real message heading into 2026: understand the themes, respect the cycles, and let long-term compounding do its work.