The global economy is currently undergoing a complex and volatile period, with significant changes in investment models and market drivers. Investors need to re-examine traditional models and actively adapt to new market dynamics to seize emerging opportunities. 2026 will not simply be a year of market recovery, but a crucial turning point where the old growth model is completely cleared out and a new industrial cycle and capital logic are formally established. If you are still preoccupied with daily market fluctuations and fragmented market news, trapped in short-term emotions, you will likely miss this round of structural opportunities. True wealth opportunities always arise at cyclical shifts where consensus is rebuilt and perceptions diverge.
Microeconomics is Macroeconomics
Capital expenditure targets related to artificial intelligence (AI) development are extremely large and have already had a macroeconomic impact. Overall revenue may justify these expenditures, but it is currently unclear how much of the revenue will actually flow to the technology companies involved in building AI. We maintain our risk appetite and overweight US equities on the AI theme. We believe now is an excellent time for active investment.
Financial Leverage in Progress
The development of artificial intelligence (AI) requires substantial upfront capital investment, while revenue growth is realized in the later stages. This creates a phased financing challenge that necessitates leverage. However, a financial system with high leverage ratios may be more vulnerable. We believe there are AI-related investment opportunities in both public and private corporate bond markets. Simultaneously, we have tactically reduced our allocation to long-term US Treasury bonds.
The Illusion of Diversification
In a market driven by only a few forces, "diversification" away from these factors is more challenging than ever. We believe portfolios need clear alternatives and the ability to adapt flexibly. Traditional diversification tools such as long-term bonds are less effective at buffering against declines in risky assets. We prefer to seek opportunities with unique sources of return in the private market.
Disruptive Trends Reshaping the Global Landscape
Disruptive trends (especially the development of AI) are reshaping the global economy and financial markets. The technology industry is gradually becoming capital-intensive, and the speed and scale of AI development may reach unprecedented levels. Currently, the market is dominated by a few major disruptive trends, and investors must anticipate the direction of these trends. Therefore, there is no truly neutral stance, even for those with broad index allocations.
The speed and scale of AI development may have reached unprecedented levels. The shift from a light-capital model to capital-intensive growth is profoundly reshaping the investment environment and driving far-reaching impacts across multiple levels, including the real economy, finance, and socio-political sectors.
In recent months, market concerns about stock market valuations and whether AI is creating a bubble have intensified. Historical experience shows that market bubbles have occurred during all major historical transitions, and therefore, a recurrence is possible. However, these bubbles tend to inflate for a period of time, only revealing their true nature after they burst. In light of this, we focus on the potential magnitude of AI-related investments and returns, and use this as a basis to track this transformation. This outlook aims to help investors understand this trend and develop forward-looking strategies.
We maintain a risky appetite and believe that the AI theme remains a core driver of the US stock market. However, we believe this environment creates an opportunity for active investment—to identify the winners and losers among current and future builders as the AI dividend gradually spreads.
Conclusion
Looking ahead to 2026, policies to stimulate consumption will continue to work in tandem with both supply and demand to promote steady consumption growth, with service consumption remaining a significant driving force. From the supply side, policies will focus on expanding the supply of high-quality goods and services, optimizing the business environment in the consumer sector, and stimulating market vitality and innovation potential through measures such as relaxing market access and promoting business model integration. From the demand side, the trade-in policy for consumer goods will continue, but the scope of subsidies may be adjusted to more precisely target the optimization and upgrading of the consumption structure, focusing on expanding areas such as AI+ consumption, senior citizen consumption, and childcare consumption. Smart wearable devices, age-friendly products, strollers, and child safety seats are expected to be included in the subsidy scope.