Markets appear primed for a pause after an extended strong run, with elevated valuations leaving asset classes vulnerable to surprises. Kim Inglis at Raymond James notes the S&P 500 delivered 15%+ returns in six of the last seven years, a rare streak, and volatility has been subdued since spring 2025. "You can't go to the track and sprint forever" she analogizes. A breather would be natural and healthy, offering chances to buy high-quality names on temporary dips.

Optimism persists despite potential choppiness. Consumer spending, roughly 70% of U.S. GDP, remains resilient, bolstered by recent tax cuts boosting disposable income. Monetary policy stays accommodative with moderating inflation allowing further rate cuts expected in Canada and the U.S., typically positive for stocks and bonds. Corporate earnings show resilience, with consensus S&P 500 forecasts around 12%-13% growth this year. Shareholder-friendly actions like dividend raises and buybacks add support, alongside fiscal policy tailwinds. Cash on the sidelines provides dry powder for renewed confidence.

Returns likely moderate from recent highs but stay positive. "I would expect a little bit more muted returns, but still positive returns" Kim Inglis says.

AI's dominance continues, but focus may pivot to enablers. "AI has been so transformative... likely what we might see this year though, would be more of a shift... to more companies that are maybe enabling AI infrastructure, like robotics" she observes. Investors should drill deeper into foundational plays supporting high-flyers.

For planning, maximize TFSAs: new $7,000 contribution room as of January 1, with lifetime limits up to $109,000 for eligible investors. "The sooner investors can get money into their TFSAs, the better" Kim Inglis urges, citing tax-free compounding.

Volatility may test patience, but underlying strength suggests dips become buying opportunities rather than exits.

Source: Video - Volatility, Opportunity, and the Road Ahead for Investors in 2026