Kim Inglis, Senior Portfolio Manager at Raymond James, discusses why higher volatility may return in 2026 and why long-term investors shouldn’t be discouraged by it. She highlights supportive fundamentals—from resilient consumer spending and moderating inflation to solid earnings growth and the next phase of AI—while also sharing a timely planning tip investors can act on now.
Volatility, Opportunity, and the Road Ahead for Investors in 2026
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Interviewer:
Joining us now with more on the markets in the year ahead and one timely financial planning tip, investors connect on right away is Kim Ingalls, senior portfolio manager at Raymond James. Well, first, Kim, should investors expect more volatility this year?
Kim Inglis:
Yeah, so I mean, I wouldn't be terribly surprised if we saw a bit of volatility. If you look at a lot of the asset classes out there, valuations are pretty elevated at the moment, which would obviously then make them vulnerable to negative surprises and that sort of thing. Also, we've been on such a good run lately. If you look at the S&P 500, six of the last seven years, we've seen returns 15% or above, which is pretty rare. And then we also haven't had much in the way of volatility since basically the spring of 2025. So you could say that it's probably due. But what I would say though is an analogy that I like to use is that you can't go to the track and sprint forever. Every now and again, you have to stop and catch your breath. And the markets are really no different. They're due for a bit of a breather. That said, if we get one, that would be very natural, normal and healthy. And so investors should embrace it and use it as an opportunity to pick up some really high quality names that might temporarily go on sale.
Interviewer:
Now, if markets do become more volatile, what are the key reasons investors should still feel optimistic?
Kim Inglis:
Yeah, so I'd say there are a number of reasons. One of which I would look at the fact that the consumer represents about 70% of US GDP. And consumer spending has still been pretty resilient. And then from a consumer standpoint, the recent tax cuts, that should give them a bit of a boost in disposable income, which obviously then would be supportive of spending. Another thing that I would consider would be monetary policy. It's been relatively supportive of the markets. We've seen some rate cuts and with inflation moderating, that leaves some room for some more rate cuts to happen. And in Canada and the US expectations are for another rate cut this year. And generally speaking, when interest rates come down, that tends to be a good thing for both stock and bond markets. So those would be some good highlights there for sure.
Interviewer:
Now, what other market factors are supportive and what should investors keep in mind going forward?
Kim Inglis:
Yeah, so I would look at companies. Corporations are doing well. Corporate earnings have also been pretty resilient. And the consensus forecast for corporate earnings for the S&P 500 for this year is between 12, 13% seems to be about the average there on the street. That would help justify valuations a bit and that sort of thing. Companies are also doing a lot of really shareholder friendly activities right now. Raising dividends during buybacks. That's obviously a good thing for shareholders. And companies as well will benefit from some of the fiscal policy that's been coming down the pipes. So those are good things companies doing well. Investors are also holding a fair bit of cash right now. So that means they have a good amount of buying power if there's some confidence come back with things. So that's a good thing as well. In terms of setting expectations though, I would say that investors should expect a little bit more muted returns than what we have seen over the last number of years here. We've had again really strong markets and that can't go on forever. I would expect a little bit more muted returns, but still positive returns.
Interviewer:
And AI, let's talk about AI for a second. It's dominated headlines and markets for the last couple of years. Kim, what should investors expect more? More AI news or what's next?
Kim Inglis:
Yeah, so AI has definitely dominated the news last couple of years. And I don't think that story is going away any time soon. You know, I mean, I think if you look at things, AI has been so transformative, you know, across the globe, across all industries, across all facets of life, whether it's going to the doctor's office to cloud computing to you name it. It's virtually everywhere. I think that likely what we might see this year though, would be more of a shift in AI as to where some of the focus might go. So, you know, where you might see some of the focus goes would be more companies that are maybe enabling AI infrastructure, like robotics and that sort of thing. So from an investor standpoint, what I would say is that instead of, you know, looking at the names that have really worked the last few years, maybe they want to drill down a little bit deeper and look at the companies that are, you know, building the foundation that can help some of the companies that have been the high flyers over the last little while, help them continue that growth. So more AI infrastructure and foundational AI companies.
Interviewer:
And finally, Kim, let's switch gears to financial planning. What's one smart move that investors can make right now?
Kim Inglis:
Yeah, so definitely, I would say maximizing your TFSAs, your tax-free savings accounts. I know I talk about TFSAs quite a bit, but I truly believe that they are one of Canada's best planning tools and they're still relatively underused. As of January 1st, investors, eligible investors will have received in a different, additional $7,000 worth of contribution room. And if you've always been eligible for a TFSA, but you've never had one, your lifetime contribution limit right now is 109,000, which is pretty significant. And I think that the sooner investors can get money into their TFSAs, the better, because they allow it to then grow in a completely tax-free environment and then be able to benefit from the power of compounding without the taxes chipping away at things. So it's really a great tool for investors and I would encourage them to utilize that sooner rather than later.
Interviewer:
Well, Kim, thank you so much for being with us today and thank you to everyone out there watching once again, that was Kim Ingles with Raymond James, and I'm your host Jenna Dagenhart with Asset TV.