2026 Global Financial Market Outlook
Investment Strategy Announced
SC First Bank announced on December 23 that it has released the "2026 Global Financial Market Outlook and Investment Strategy" report for its wealth management (WM) clients.
Global investment strategy experts from SC First Bank and its parent company, Standard Chartered (SC) Group, presented the core theme for wealth management in 2026 as "Blowing bubbles? The essence revealed when doubts are removed." They assessed that it is premature to assume the ongoing uptrend in the stock market, led by the artificial intelligence (AI) sector, has entered a full-fledged bubble phase. They further noted that, despite continued debate over bubbles in the new year, risk assets are expected to deliver relatively solid performance, supported by an AI-driven technology innovation cycle, favorable fiscal and monetary policy stances, and easing trade tensions.
The report diagnosed that, as the market enters an uptrend, the performance gap between different assets or regions is likely to widen, further highlighting the importance of selective investment approaches and portfolio diversification. In response, it suggested three investment strategies: increasing global equity allocation led by Asia (excluding the United States and Japan), expanding exposure to emerging market (EM) local currency bonds, and increasing allocation to gold.
For equities, the report projected that AI-driven earnings growth will allay valuation concerns, but emphasized that as the market becomes more inflated, performance disparities between assets will widen, making diversification essential. In particular, given heightened expectations for the AI theme, it recommended reducing excessive concentration in U.S. technology stocks by diversifying across regions-focusing on Indian and Chinese equities in Asia-and spreading investments across various sectors to guard against potential disappointments in AI-related results.
Regarding bonds, the report anticipated that attractive income opportunities can be found in emerging market (EM) bonds rather than those from developed markets (DM). It also evaluated that diversification into gold-which shines as a tool during times of uncertainty-as well as Japanese yen (JPY) and Chinese yuan (CNH), can serve as alternatives to reduce volatility while enhancing expected returns.
The report identified the main risks for the 2026 market as the potential for overheated expectations in the AI industry, credit events and geopolitical uncertainties, a shift in policy stance by the U.S. Federal Reserve, and the Bank of Japan's (BoJ) hawkish moves. It stated, "Rather than simply defining the current market environment as a bubble phase, attention should be paid to the possibility of asset price adjustments amid increasing volatility," and emphasized, "It is important for investors to refrain from emotional reactions and to maintain their pre-established asset allocation principles."
Sachin Bhambani, Deputy President and Head of Affluent/Wealth Management at SC First Bank, said, "In 2026, a strategic approach that manages volatility and captures opportunities through a diversified portfolio will become even more important," adding, "Maintaining a balanced asset allocation strategy from a long-term perspective, rather than being swayed by short-term market noise, will be key to enhancing investment performance."
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