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CLA OUTLOOK

Key Insights for Sound Financial Strategies

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JANUARY 26 WEEKLY INSIGHTS
Volatility returns on potential U.S.-EU trade war
  • As world leaders gathered in Davos, Switzerland, tensions were elevated over President Trump’s ambition to take over Greenland.
  • European leaders remain at odds given Trump’s proposed new tariffs despite the current trade deal reached last year.
  • While stocks sold off 2% last Tuesday, the CLA Outlook maintains that fundamental economic data continues to indicate a growing economy, which will serve as a long-term tailwind for equities. 
  • However, equity market corrections regularly take place — with the market selling off on average 14.2% intra-year — and reinforcing the need to maintain a diversified portfolio. (Source: MarketWatch)
Preferred securities hit new all-time highs
  • Preferred stock is a class of equity sitting between bonds and common stock with characteristics of both.
  • These hybrid investments are off to a strong start in 2026 reaching new all-time highs, with dividends reinvested, up 2.6% year-to-date.  
  • We believe preferred stocks help portfolios reduce risk and create a steady stream of tax-advantaged dividend income, currently yielding 6.3%. (Source: CLA Outlook, Morningstar)
Private investments are increasingly accessible, but risks remain the same
  • Private investments have historically been structured as partnerships with only qualified clients gaining access to invest.
  • More funds are coming to market in funds marketed to retail clients with favorable 1099 tax reporting.
  • The risks of these investments haven’t changed however, and these investments should be deployed in conjunction with a financial professional.
  • CLA implements an institutional process to private investments — managing by asset class, manager, strategy, and vintage year. (Source: CLA Wealth Advisors)
Develop strong financial strategies
Tune in to the CLA Outlook for 2026 as we discuss timely topics around policy, the economy, and market performance.
Read the CLA Outlook
Strategic Opportunities
The Big Picture for 2026
The CLA Outlook signals a turning point: stabilized inflation, growth above trend, and easing interest rates. Explore the key forces influencing portfolios in the year ahead.
  • Economic outlook
    Growth is back on the horizon after three years of higher interest rates and restrictive Federal Reserve policies, with AI helping to transform industries.
  • Fiscal policy
    The rising U.S. deficit remains a key concern as government spending continues to outpace revenues — watch for this to be a focal point heading into midterm elections.
  • Fixed income outlook
    Lower interest rates should be a tailwind to bonds in 2026, though consider credit quality and duration when building high-quality income portfolios.
  • Equity outlook
    Despite elevated stock valuations, led by tech-dominant Magnificent-7 stocks, equities remain compelling because of strong earnings growth and a robust economic backdrop.
  • Alternatives outlook
    Lower interest rates favor private equity and private real estate, while private credit can warrant caution. Manager selection and due diligence remain critical.
  • We can help
    No matter your financial position, incorporating sound tax and wealth advisory could help you achieve more.
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