ALL SYSTEMS ARE GO… FOR 2026
Chances are, at least half of the people reading this newsletter remember a familiar phrase NASA used when America was putting a man on the moon in the 1970s. As the Apollo rockets prepared for launch, television viewers would watch mission control go around the room, one system at a time, saying, “Fuel system status?” One by one, each team confirmed readiness by saying, “We are go.” It was methodical—and oddly exciting.
And then finally, the launch coordinator would declare, “All systems are go.”
Before we talk about the investment systems we have in place for 2026, let me get my annual market prediction out of the way. Each year, I revisit my prior forecasts to see how they held up. Last year, I projected a market return of roughly 12% to 13%. The year before that, I said we were still in a bull market and should expect bull-market-type returns. The good news is, we are still in a bull market. In fact, as I’ve been saying for the past couple of years, this may ultimately prove to be one of the greatest bull markets of the last 50 years.
SYSTEMS CHECK
Let’s go around the room and see how the systems/business environment looks as of now.
Tax cuts are going to go into effect for literally millions of Americans spanning a broad cross-section of the population. Most importantly, at least from an economic standpoint, what’s happening on the business side?
- Businesses can now deduct 100 percent of capital expenditure in year one. This has never happened before. It creates a powerful incentive for companies to immediately invest in factories, buildings, machinery, and other capital goods.
- Regulations that have historically slowed or paralyzed business activities are being rolled off the books very aggressively, which allows companies to move faster and operate more efficiently.
- Companies are onshoring production. COVID taught corporate America a hard lesson. Global supply chains spanning the world are neither reliable nor resilient. So, companies are onshoring back their production.
- Investing in America is accelerating. An example is Taiwan Semiconductor, the world’s largest chip manufacturer, which is now committed to building a semiconductor foundry in Arizona and estimates it will invest as much as $300 billion(1). And folks, this is just one company of many coming here.
- The U.S. is leaps and bounds ahead of every country in artificial intelligence, including China. We are at least two to three generations ahead in advanced semiconductor chips.
- The race to build AI and data centers is creating massive job demand. Beyond direct employment in the data centers, the country is racing to upgrade the electric power grid, which many people say is going to create jobs for half a million electrical workers, linemen, electricians, and engineers, as well as hundreds of thousands of jobs in HVAC construction, mining, and energy jobs.
- When you look at data centers, they’re kind of like the factory of the 21st century. What they do is convert energy into processing capacity.
- America is the largest energy producer in the world. I recently purchased gasoline for $2.49 a gallon, something I haven’t seen in many years.
- The defense industry is ramping up both to rearm and to maintain America’s military superiority.
- Interest rates are trending downward, unlike the increases that we saw from 2020 to 2023. This really matters. Home building is a crucial driver of the U.S. economy. Most homeowners who had 3% mortgages were never going to move just to assume a 7% or 8% mortgage. Lower rates should help unlock housing deand.
PRODUCTIVITY SURGE
The U.S. economy has been stuck in a 1% to 2% range of GDP growth for the past 10 to 15 years. History shows that when productivity rises, GDP rises, and company stock prices also rise. Let me repeat that.
Normally, when GDP rises, company stock prices also rise. The last major productive surge we had was in the 80s and 90s, driven by the internet.
Today, artificial intelligence has the potential to drive productivity gains on a scale we haven’t seen in decades. Yes, AI will disrupt certain jobs and industries—but change always does. Fax machines disrupted mail. Email disrupted fax machines. Kodak once controlled nearly 90% of the photo and film market—until cameras were built into phones. Innovation always creates winners and losers, but the net effect is higher productivity and stronger economic growth. I believe AI will have a meaningful impact on GDP. If you want to track it, watch GDP growth in the first and second quarters. I expect growth in the 3% to 5% range.
WRAPPING UP
I’ve been an investment advisor for decades, and I can honestly say that I’m having the time of my life. I bought my first investment when I was 15 years old. Investing was an interest of mine even as a teenager. Over the years, I’ve lived through multiple bull markets and bear markets, and each one has reinforced the same lesson. Know what market you’re in and invest accordingly. As many of you know, I have no intention of retiring. My health is perfect, and I enjoy this business immensely. The truth of the matter is that this business, helping people create reliable income streams for retirement, is incredibly gratifying. And rest assured that I use the same strategies in my own personal accounts.
THANK YOU
I also want to sincerely thank you for being a client. I can’t tell you how much pleasure I get from helping retirees achieve their goals. There isn’t a week that goes by that I, or my staff, don’t hear from a client or sometimes even their children, and you know what, we hear from their grandchildren expressing genuine appreciation for the help we’ve provided as well.
HEY, I COULD USE YOUR HELP
As many of you know, I don’t do traditional marketing—no seminars, mailers, or advertising. That allows me to focus on what matters most: investment research and working directly with clients. My team handles the day-to-day details, and I’m grateful for their support. Each year, I try to bring in about 6 to 10 new clients through referrals from people I already work with and trust. If someone comes to mind who might benefit from a conversation, I’d appreciate your help. This could be:
- An adult child whose net worth is largely in a 401(k) and receiving little guidance
- Someone nearing retirement and wondering how to create a reliable income
- A friend who recently lost a spouse who managed the finances
- simply someone dissatisfied with their current advisor.
We may or may not end up working together, but I can promise they’ll be treated with the same care, respect, and the professionalism you receive. Thank you for your continued trust and confidence. It truly means more to me than you know.
Sincerely,
John Romano, CFP®
Office Phone: 352-753-8590
Email: john@romanojohn.com
Address:
3261 US Hwy 441
Building D2
Fruitland Park, FL, 34731
Data contained in this newsletter is obtained from what are considered reliable sources; however, its accuracy, completeness, or reliability cannot be guaranteed.
John Romano, CERTIFIED FINANCIAL PLANNER™, has over 30 years of experience in the financial field. John is a Registered Representative with Osaic Wealth, Inc. (a member of the FINRA and SIPC) and an Investment Advisor Representative with Osaic Wealth, Inc. He has prepared hundreds of reports for retirees to assist in their retirement income planning needs. He is dedicated to providing portfolio analysis, dividend and income information, and investment management services to retirees (and those preparing to retire) in The Villages, Florida, and throughout the United States.
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