I F*KED Up… My INSANE Stock Market Prediction For 2026

The speaker discusses significant changes to their investment portfolio, marking one of their biggest shifts since 2020. They emphasize the importance of re-evaluating investment strategies, as conditions, personal life, and risk tolerance can change. The speaker warns that ignoring one's portfolio and letting it run on autopilot can lead to missed opportunities or significant losses. The first major change is an increased allocation to the stock market, specifically into an S&P 500 index fund. Despite current stretched valuations and market uncertainty, the speaker notes that every past attempt to be cautious and wait for a market dip has led to regret. They advocate for consistent dollar-cost averaging and using any market dip as an opportunity to buy more. This strategy is based on the observation that the S&P 500 has outperformed most other asset classes over the last decade. Alongside the S&P 500, the speaker is increasing international diversification, which currently makes up about 28% of their stock market portfolio. While historically underperforming the United States, international investments have shown strong performance recently, with a 38% year-over-year increase compared to the S&P 500's 29%. The speaker believes that other countries have more room for growth due to the established nature of the U.S. market. They are also investing more in emerging markets, acknowledging the higher risk and volatility but seeing asymmetric upside for increased diversification. This international exposure serves as a hedge, providing a fallback if the U.S. market underperforms. The core stock allocation strategy is to invest heavily in the S&P 500 and emerging markets, and to reduce holding excessive cash. The most significant and disappointing change is the decision to sell almost all real estate properties, with the exception of the speaker's primary residence. This decision is primarily driven by the challenging regulatory environment in Los Angeles and California, which has made it nearly impossible for small landlords to operate profitably. The speaker highlights that insurance costs have doubled, repair costs have tripled, and legal fees for landlord-tenant communications have become exorbitant due to the litigious nature of the city. They recount an anecdote where a tenant's seemingly ludicrous offer in mediation, involving cash to leave and waived rent, turned out to be the landlord's best-case scenario due to the high costs and delays associated with evictions. The speaker contrasts this with a past eviction in 2012, which cost $1,500 and took 60 days, whereas today, a similar eviction could cost $50,000 to $60,000. Despite still being profitable on these properties, the speaker notes that investing the proceeds into government treasuries would yield similar returns without the associated risks, headaches, and lack of liquidity. Regarding other opportunities, the speaker is paying close attention to Bitcoin. They have been dollar-cost averaging into a Bitcoin ETF, viewing it as an investment where they are comfortable with potential loss but see the possibility of significant upside. Despite a 50% drop from its peak, the speaker is increasing their allocation, believing that the best time to buy Bitcoin is when general sentiment is negative. They acknowledge the risks, especially with advancements in quantum computing, but also highlight arguments that growing institutional participation could diminish Bitcoin's volatility, making it more of a portfolio efficiency tool. The speaker's reasoning for buying more Bitcoin includes massive government deficits, rising national debt, and accelerating institutional adoption, which present a compelling asymmetric upside for diversification. The portfolio also includes a significant cash and treasuries position, making up about 25% of the total. This is invested in tax-free municipal bonds earning approximately 4.2% and government treasuries earning about 3.5%. However, the speaker admits that this allocation has become too large, reflecting a shift in mindset from aggressive growth to capital preservation. They recognize that while being aggressive is suitable for younger investors with less to lose, at a certain point, the focus should shift to protecting accumulated wealth. The speaker is now re-deploying some of this cash into the markets and other investments mentioned earlier, viewing it as a "great rotation" of funds. Beyond traditional assets, the speaker invests in cars and collectibles. A 2005 Ford GT, bought in 2021, has appreciated by about 65%, performing similarly to the S&P 500, and is considered one of their best purchases. Conversely, a 2010 Tesla Roadster resulted in a 30% loss, failing to become a future classic as anticipated due to plummeting Tesla values and repair costs. The speaker suggests that certain classic cars like the Honda S2000, Lotus Elise, or Ferrari 458 can increase in value by 2-5% annually, but ultimately, cars should be viewed as lifestyle purchases that offer enjoyment regardless of their investment performance. Another asset class is artwork, specifically early Disney pieces and signed memorabilia like a Tommy Pickles Rugrat cel and a signed Michael Jordan from Space Jam. While more of a hobby, the speaker finds that pursuing a niche interest in collectibles can also yield financial returns. This also applies to watches, which the speaker has been collecting, with some pieces performing well. Finally, the speaker discusses private equity investments, which they deeply regret. Six years ago, they invested in early-stage companies they liked, and while some appear to have done well on paper, the illiquidity is a major issue. Investors are locked up for years, potentially indefinitely, facing mandatory holding periods, dilution, and limited redemption windows. Selling on the secondary market often requires significant discounts, if a buyer can be found at all. The speaker emphasizes that even if an investment is up 300%, the inability to access the capital makes it practically worthless, highlighting the importance of simplicity and liquidity over perceived paper returns. In conclusion, the speaker stresses the importance of self-awareness in investing, running the numbers, and not being afraid to make changes, even if it means letting go of strategies that once worked. The best portfolio, they argue, is not the most impressive on a spreadsheet, but one that allows for a life without constant financial worry, characterized by fewer moving parts, more liquidity, and a focus on making the portfolio work for the individual.