Biggest Risks to the Market?

Jan 9, 2026

In mid-December, we sent Bespoke’s client base a survey to capture the current thinking of experienced investors on markets, the economy, policy shifts, and portfolio positioning heading into 2026 and beyond.  Last week, we published our 2026 Investor Sentiment report with a detailed summary of the survey’s results.  If you aren’t currently a client, you can start a trial here to view the full report and start receiving everything else we publish on a daily basis.

A bubble in AI has been discussed over and over again across financial media over the last year or so as that area of the market saw outsized gains.  But is froth in the AI trade really the biggest concern among investors heading into 2026, or are there other issues that are just as worrisome?

In a survey of investors (using Bespoke’s large client base) at the end of 2025, we asked participants what the biggest risk is to sustained market growth in 2026 and beyond.  As shown in the chart below, an “AI bubble” actually ranked as the least concerning issue of the various options provided.  The answer that received the most votes at 34.7% was actually an “economic downturn,” followed by the “political environment” at 22% and “persistent inflation” at 19.4%.  “Other” received 11.8% of the vote, which was the same response rate that an “AI bubble” received.

Below we’ve broken out the response rates to our question on the biggest risk to sustained market growth by whether the survey participant is bullish or bearish on the stock market in 2026.

Notably, those that are bearish on the market were even more concerned about an economic downturn at 45%.

Just this week we’ve gotten a number of releases on the US trade balance and productivity that caused the Atlanta Fed’s GDPNow reading to pop up to 5.1% for Q4 2025.  If this trend continues, worries about an economic downturn are likely to subside, which could cause bears to decide to increase their risk exposure.  This would likely translate into higher share prices and potentially a broadening of the bull market into areas that aren’t solely based on the AI trade.

Another question we asked investors in our 2026 survey is how they have adjusted their equity allocations in response to the Trump Administration.  We always urge investors to not let their politics impact their investment decisions, because historically, it would have been very unwise to try and jump in and out of the market based on who controls the White House or Congress.  However, of course there are investors out there that have either gotten out of the market or increased exposure because of their opinions about President Trump.

What we found, though, is that while most investors have either made no changes or merely maintained but shifted equity exposure due to the Trump Administration, a considerably higher percentage (19.4%) said that they’ve increased equity exposure than those that said they’ve reduced exposure (9.8%).  This suggests to us that regardless of whether you like Trump or not, the admin should remain a tailwind rather than a headwind for the market at least for another year or so.  Again, jumping in or out of the market based on who’s President is not recommended.

Not a Bespoke client?  We’d love for you to give our equity research platform, Bespoke Premium, a try.  You can sign up for complimentary access for 14 days at this link to read our full 2026 Investor Sentiment report and start receiving our daily research emails today!

Fed Credibility and Powell’s Performance

Jan 5, 2026

In mid-December, we sent Bespoke’s client base a survey to capture the current thinking of experienced investors on markets, the economy, policy shifts, and portfolio positioning heading into 2026 and beyond.  Last week, we published our 2026 Investor Sentiment report with a detailed summary of the survey’s results.  If you aren’t currently a client, you can start a trial here to view the full report and start receiving everything else we publish on a daily basis.

The Federal Reserve has been front and center in investors’ minds for a few years now, and President Trump’s open call for Chair Powell to resign (or be fired) hasn’t helped.  We don’t think the Fed helps its cause, though, with so much “Fedspeak” all the time.

In our 2026 Investor Survey, we asked respondents to rate how much credibility the Fed has with investors on a scale of one to ten with one being no credibility and ten being full credibility.

As shown below, investors still think the Fed has more credibility than not.  On a scale of one to ten, seven was the highest response rate at 30.1%, while less than 10% of respondents rated Fed credibility a three or less.

Those that lean left in our survey think the Fed has more credibility than those that lean right, but there’s not too big of a difference by political leaning either way.

Those that are more bearish on markets in 2026 rated the Fed slightly less credible than those that are bullish, although again, the differences are small.

When it comes to Fed Chair Powell specifically, 60.7% of investors rate him as a Good or Excellent Fed Chair, while 24.6% say he’s been average, and just 14.4% rated him as Poor or Very Poor.

Those who lean left are much more likely to rate Powell as “Excellent” than those who lean right, while investor opinions on the stock market in 2026 had little impact on their views of Powell.

While a small minority views Powell and the Fed as captured or no longer having credibility, our survey results show that investors generally think the Fed is doing fine and as not anything to be too concerned about as it relates to market performance.

Not a Bespoke client?  We’d love for you to give our equity research platform, Bespoke Premium, a try.  You can sign up for complimentary access for 14 days at this link to read our full 2026 Investor Sentiment report and start receiving our daily research emails today!