2026 Investment Outlook: Identifying Investment Opportunities at the Kondratiev Wave Turning Point

Fifty years of spring and autumn, a game of chess; the whistling horse years arrive again.

Who will be the first to sense the coming of wind and clouds? Hidden in the armor, waiting for dawn.

In 2026, the Year of the Horse (Bing Wu). Looking back from this point in time, you will find an astonishing coincidence: according to Kondratiev long-wave theory, every 50-60 years there is an economic cycle, and the end of its depression phase coincides precisely with the beginning of its recovery phase. This is not just an ordinary calendar page turn, but a turning point of an era. Global computing power dominance is reshaping, the international monetary system is accelerating its reconstruction, and the “14th Five-Year Plan” is underway. When the end of the old cycle and the start of the new cycle overlap at the same moment, 2026 is destined to be an extraordinary year.

Many worry that the Federal Reserve’s leadership change will lead to a hawkish turn, but my judgment is quite the opposite: 2026 will still be a year of global easing.

There are three reasons:

First, the US cannot do without a weak dollar. US stocks are high, US debt issuance faces enormous pressure, and with midterm elections approaching in November 2026, any tightening could be the straw that breaks the camel’s back.

Second, AI arms race requires easing. Google, Meta, Amazon, Microsoft will collectively spend up to $630 billion in capital expenditures in 2026, with projects like Genesis and Economic Gateways costing hundreds of billions. AI investment is the core engine of the resilience of the US economy today; whoever is the Fed chair would not dare to cut off this vital blood supply easily.

Third, even if the Fed maintains a wait-and-see stance in the first half (with a first rate cut likely after June), there is still room for about two rate cuts throughout the year, making the overall interest rate environment relatively loose.

Major global institutions generally have a more optimistic GDP forecast for 2026 compared to 2025, with mild recovery becoming a consensus. Loose monetary policy drives interest rate easing, and economic recovery supports fundamental improvement. This logical chain points to a clear conclusion: 2026 will be a big year for raw materials.

Non-ferrous metals (copper, aluminum, zinc, nickel) will remain active, and commodities with chemical properties are also worth close attention.

For China, 2026 carries even greater weight.

It is the starting year of the 14th Five-Year Plan. The 19th National Congress mentioned that by 2035, socialist modernization should be basically achieved. Reversing the timeline, the 14th Five-Year Plan is the beginning, the 16th Five-Year Plan is the conclusion, and the 15th Five-Year Plan is the critical phase.

Starting from 2026, we will enter a five-year period of vigorous development and comprehensive efforts.

Trend 1: Industrial innovation to avoid inward-looking competition

The “15th Five-Year Plan” repeatedly emphasizes one keyword: industrial innovation. The official statement is: “In the context of profound adjustments in the global political and economic landscape and increasingly complex and intense great power competition, industrial innovation will become a key focus to effectively avoid inward-looking competition and respond to external pressures.”

What does this mean? The era of “800 million shirts for a plane” is fading away. Even in 2025, under the backdrop of trade tensions, China’s trade surplus still exceeded $1 trillion, with the added value of high-tech products continuously rising. When your products become indispensable and irreplaceable to others, money becomes valuable. My judgment is: in 2026, the RMB will appreciate modestly, hovering between 6.5 and 6.8 throughout the year, as a natural result of industrial upgrading.

Trend 2: Boost domestic demand, shifting from “investing in things” to “investing in people”

In 2025, exports were strong enough; in 2026, domestic demand needs to “rise up.” The “15th Five-Year Plan” first proposed “combining investment in things with investment in people.” Previously, building roads and factories was “investment in things”; in the future, subsidies for childbirth, strengthening social security, and providing skills training are all “investment in people.” This is not only a policy shift but also a re-pricing of a trillion-level consumer market.

Trend 3: A new trillion-yuan industry will be embedded in the planning draft

After the National People’s Congress in March, the “15th Five-Year Plan” draft will be officially unveiled. Industries that explicitly set growth targets or even specific figures will become the focus of future investment. Looking back at the “14th Five-Year Plan”: new energy, photovoltaics, wind power, semiconductors—how many thought these were just hype? Now they have already become trillion-yuan industries. In 2026, the same story will unfold again.

Having discussed macro trends, let’s move to specific strategies.

1. Stock Market: Three directions

First is the recovery logic. With global easing, moderate economic recovery, and rising demand for basic resources, copper, nickel, silver, aluminum, as well as oil and chemicals, will show rotation.

Second is the RMB appreciation logic. Industrial innovation drives exchange rate strengthening, benefiting upstream raw materials like chemicals and paper. Rising raw material costs will eventually pass through to consumer prices. Once consumer companies raise prices, profit margins are expected to improve. This process will not be rapid, likely in the second half of the year.

Third, after the “15th Five-Year Plan” draft is released, strategic emerging industries highlighted will be the main theme for the year’s hype. Aerospace technology, quantum tech, biotech manufacturing, hydrogen energy, brain-computer interfaces, embodied intelligence, 6G—these are no longer sci-fi concepts but industries “breaking out of their cocoon.”

2. Bank Wealth Management: Yields stay low

In 2026, the 10-year government bond yield will likely stay between 1.5% and 1.8%, with bank wealth management yields around the same range, capped at about 2%. A conservative allocation is fine, but don’t expect too much.

3. Gold: High-level oscillation, rhythm is key

Gold is likely to stay high but with limited upside. Repeating last year’s doubling to $5,000 per ounce is too difficult.

Support remains: de-dollarization continues, global central banks keep buying gold, and geopolitical tensions persist (Iran’s unresolved issues, Russia-Ukraine conflict).

But new variables should not be ignored: first, policy uncertainty from US midterm elections; second, global economic recovery will divert funds; third, profit-taking from many investors who have made enough gains, which may suppress gold prices.

Investing in gold in 2026 requires precise timing: buy low, sell high, and take profits when appropriate. Avoid the mindset of “adding positions at high levels and holding long-term,” as this can easily trap you at a high point.

Opportunities and risks coexist in 2026’s changing landscape:

Federal Reserve policy pace: the first rate cut may occur after June, with the market experiencing “expectation gap” shocks in the first half.

US Treasury yields: upward pressure on the 10-year yield may push it to around 4.3% by year-end.

High volatility risk in gold: 20%-30% pullbacks are normal in a bull market.

Geopolitical black swans: after Venezuela, Iran remains uncertain; any unexpected event could impact markets.

2026, the Year of the Horse (Bing Wu). It marks the end of the old cycle and the beginning of a new journey.

From changes in Fed policies and global liquidity, to macroeconomic recovery and the “15th Five-Year Plan,” from AI-driven technological revolutions to currency battles behind gold—each piece pieces together the core thread of this new economic cycle.

Finally, I’ll end with a quote from Ding Yuan Ying: “God is the Way; the Way follows Nature; Tathagata.”

The world will not change its course because of your expectations, but you can choose to stand where it allows you to exist.

Ride your horse in the Year of the Horse; may you have the vision of a swift steed and the patience of a rider. In the market’s ups and downs, find your rhythm and move steadily forward.