by Joseph V. Amato, President and Chief Investment Officer—Equities, Neuberger Berman
Since this will be our last CIO Weekly Perspectives for this year, it seems appropriate to look back and remind ourselves of a few tried and true investment philosophies: invest with a long-term horizon and stay diversified.
This year has certainly been an interesting one (though most all years are in some way). From fears of a recession and a violent sell-off induced by the ‘liberation day’ tariffs, growth has since proved remarkably resilient while risk assets, led by equities, have recovered impressively, hitting fresh highs despite frequent bouts of market volatility.
As we look to 2026, there is an array of macro-risks and concerns around the sustainability of the equity market rally, particularly the AI-related stocks. But we remain constructive, if not optimistic, in our outlook on growth and risk markets, bolstered by an expectation for economic reacceleration driven by monetary and fiscal stimulus.
This view forms the basis of our recent Solving for 2026 outlook, which explores five important and powerful themes to navigate markets by next year.
Central to our view is that amid the periods of market stress that we anticipate seeing in 2026—broadly related to macro and policy flux and the AI investment enthusiasm—a longer-term and diversified mindset is paramount to successfully navigating through the choppiness and capturing the upside.
Indeed, while we expect risk assets to have the inevitable ups and downs next year, what’s most important when seeking to generate long-term portfolio returns is staying invested and staying diversified.
Playing the Long Game
History, both recent and distant, tells us that staying in markets during turbulent and uncertain times can often pay handsomely; for instance, since the U.S. administration announced its initial tariffs on April 2, the S&P 500 and Nasdaq 100 indexes have delivered returns of over 35% and 48%, respectively. If one simply stayed fully invested since the beginning of the year, withstanding the ups and downs, those indices are up 15% and 19%, respectively.
Such gains may feel exceptional in the context of the severity of the sell-off in April. But they’re not—far from it. Looking back, returns over longer periods of time after severe sell-offs have been even more impressive. The S&P 500 and Nasdaq 100, for instance, have to-date delivered total returns of over 160% and 277%, respectively since the peak of the Covid pandemic in March (23rd) 2020. The S&P 500 is up a remarkable 900% since the nadir of the global financial crisis in March (9th) 2009.
While these are only a handful of examples, they help demonstrate that compounding from staying invested is incredibly powerful over the long term. Trying to time the market, by comparison, is extremely difficult, often leading investors to miss out on outsized returns.
We appreciate that the market volatility we saw this year and anticipate seeing again in some shape or form next year, is stress-inducing. But it should be seen in the longer-term context, which makes it not so extraordinary. For example, the MSCI World Index shows equities have suffered 10%-plus falls in more years than not over the past half century, with more severe 20% declines having happened roughly every four years.
Stay Active and Diversified
Staying invested is not blind optimism; it is disciplined realism. Markets will deliver periods of anxiety in 2026 likely relating to policy cross-currents, AI exuberance and geopolitical noise, but history’s lesson is clear: durable wealth accrues to investors who keep a long-term lens and rebalance thoughtfully.
In practice, this means rather than chasing the latest winners or fleeing the laggards, a well-balanced portfolio helps cushion against whipsawing markets and sector rotations—whether growth to value, large cap to mid-cap, U.S. to international, cyclicals to defensives—without forfeiting participation. This diversification complements patience; it keeps compounding intact while the market’s pendulum swings, turning rotation into opportunity rather than disruption. It can also mitigate the effect of a narrow “bubble” bursting, which is often inevitable when an individual sector valuation becomes too stretched.
As monetary and fiscal supports feed through and nominal growth accelerates, the greater risk may be underparticipation, not overexposure. For 2026, broaden diversification where it makes sense, particularly across regions and styles, and be ready to pick off mispriced opportunities when the pendulum swings too far.
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