Mind Your Allocation In 2026

For only the 12th time in over a century, stocks are about to close out a third year in a bull market. The longest bull run – a five-year stretch – occurred during the run-up to the tech bubble 1995-1999.

Today, institutional and retail investors alike are “all in” on stocks.

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Retail stock allocation is near all-time highs (Source: AAII)

According to the American Association of Individual Investors, the average retail investor has about a 70% allocation to stocks. That’s well over the traditional 60/40 split between stocks and bonds. Even a 60/40 allocation ignores real estate, gold, collectibles, and private assets.

A pullback in the 10% range – which is likely in any given year – will prompt investors to scream as if it’s the end of the world.

Our “panic now, avoid the rush” strategy is simple.

Take tech profits off the table, raise some cash, and focus on industry-leading companies that pay dividends. Roll those dividends up and use compounding to your overall portfolio’s advantage.

In other words, enjoy the bull market… while it lasts.

~ Addison

P.S. Yesterday, Grey Swan Live! with Dan Amoss allowed us to end our intriguing off-the-books conversations on a high note for 2025.

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Dan opened up his GAAP accounting notes and revealed why and how he believes the AI capex spending boom will likely bust. With Dan’s characteristic ease and clarity, we sifted through some of the more arcane accounting methods that companies can use during boom times to keep up appearances for Wall Street analysts. Perhaps, more to the point, he showed his own technique for turning those tedious insights into actionable and quick hit gains using options.

Near the end of the session, Dan shared a few bullish trades he’s sitting on in natural resources, mining and precious metals – a sector he expects is in “the second or third inning” of its own bull run. There’s a lot more to come in 2026.

When we return with Grey Swan Live! in early January, we encourage you to join us. The live Zoom calls have turned out to be one of the greatest benefits of being a member of Grey Swan Investment Fraternity and a highlight of our week each week.

Members can access the 2026: Something Wicked This Way Comes episode of Grey Swan Live! with Dan Amoss replay in the members-only archive of the Grey Swan Investment Fraternity site here.

If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.

Today, institutional and retail investors alike are “all in” on stocks.

Turn Your Images On

Retail stock allocation is near all-time highs (Source: AAII)

A pullback in the 10% range – which is likely in any given year – will prompt investors to scream as if it’s the end of the world.

Our “panic now, avoid the rush” strategy is simple.

Take tech profits off the table, raise some cash, and focus on industry-leading companies that pay dividends. Roll those dividends up and use compounding to your overall portfolio’s advantage.

In other words, enjoy the bull market… while it lasts.

~ Addison

P.S. Yesterday, Grey Swan Live! with Dan Amoss allowed us to end our intriguing off-the-books conversations on a high note for 2025.

Turn Your Images On

Members can access the 2026: Something Wicked This Way Comes episode of Grey Swan Live! with Dan Amoss replay in the members-only archive of the Grey Swan Investment Fraternity site here.

If you have requests for new guests you’d like to see join us for Grey Swan Live!, or have any questions for our guests, send them here.

Relative to GDP, the net international investment claim on the U.S. economy was 20% in 2003. It had swollen to 65% by 2023. Practically every type of American company, bond, or real estate asset now has some degree of foreign ownership.

But it’s even worse than that. As the federal deficit has pumped up the GDP figures, and made a larger share of the economy dependent on government spending, the quality and sustainability of GDP have deteriorated. So, foreigners, to the extent they are paying attention, are accumulating claims on an economy that has been eroded by inefficient, government-directed spending and “investments.” Why should foreign creditors maintain confidence in the integrity of these paper claims? Only to the extent that their economies are even worse off. And in the case of China, that’s probably true.

As global government interest expense climbed, gold quietly followed it higher. The IIF estimates that interest costs on government debt now run at nearly $4.9 trillion annually. Over the same span, gold prices have tracked that burden almost one-for-one.

Silver has recently gone along for the ride, with even more enthusiasm.

Since early 2023, Japan’s 10-year government bond yield has risen roughly 150 basis points, touching levels not seen since the 1990s.

Over that same period, gold prices have surged about 135%, while silver is up roughly 175%. Zoom out two years, and the divergence becomes starker still: gold up 114%, silver up 178%, while the S&P 500 gained 44%.

In a healthy economy, production and consumption communicate constantly. If a company builds something useful, customers respond by buying it. If they overbuild, inventories pile up and prices fall, sending a signal to slow down.

AI infrastructure, by contrast, is being built largely on faith. Companies are scaling up compute power without clear signs of sustainable demand. Unlike oil and gas, where prices adjust second-by-second, AI companies operate in a fog. They release tools, collect usage stats, and hope that paid conversions will follow.

But hope is not a business model.

Six months ago — before the GENIUS Act was signed and before Washington put a nameplate on what had already begun — we were describing a slow rewiring of money.

For better or worse, we called it Dollar 2.0: the quiet migration of finance from paper promises and batch settlement to tokens, smart contracts, and ledgers that never sleep.

The name Dollar 2.0 is derived from the way Treasury Secretary Scott Bessent has been touting the stablecoin environment’s promise to create a larger global market for U.S. dollars and Treasurys.

Silver has recently gone along for the ride, with even more enthusiasm.

Since early 2023, Japan’s 10-year government bond yield has risen roughly 150 basis points, touching levels not seen since the 1990s.

But hope is not a business model.

Six months ago — before the GENIUS Act was signed and before Washington put a nameplate on what had already begun — we were describing a slow rewiring of money.

For better or worse, we called it Dollar 2.0: the quiet migration of finance from paper promises and batch settlement to tokens, smart contracts, and ledgers that never sleep.

The name Dollar 2.0 is derived from the way Treasury Secretary Scott Bessent has been touting the stablecoin environment’s promise to create a larger global market for U.S. dollars and Treasurys.