Here’s how I’m positioning for 2026.
Markets are volatile right now. Greenland tariff threats, Japan policy uncertainty, and rotation out of AI stocks have the S&P 500 down and VIX elevated. But volatility creates opportunity.
Trump needs wins before the midterms. Between Venezuela military strikes, the new Board of Peace initiative, and pushing NATO allies toward 5% defense spending, the message is clear: domestic industrial expansion and increased defense spending. I’m focusing on three sectors—Industrials, Consumer Discretionary, and Health Care—that capture what Trump needs to deliver.
Return target: 15-25%
- vs. S&P 500 expected ~8-10%
- vs. Russell 2000 expected ~12-15% (I’m tilting toward smaller companies)
My 2026 Bet: Three Sectors
This covers US-listed stocks only. I’ll write about Singapore and other markets separately.
The Setup
| Sector | What I’m Buying | Why It Works |
|---|---|---|
| Consumer Discretionary | E-commerce, Autonomous vehicles, Restaurants | Tax refunds + rate cuts + cheaper gas = people spend more |
| Industrials | Defense, Airlines, Construction, Machinery | Tax refunds (indirect) + corporate tax cuts + rate cuts + cheaper fuel + defense spending surge |
| Health Care | Pharma & Biotech, Medical Devices, HealthTech | Tax refunds (elective procedures) + corporate tax cuts + rate cuts |
| Crypto | Bitcoin, Digital assets | Speculative bet (not a hedge) |
Consumer Discretionary: Where Tax Refunds Get Spent
I’m starting here because this is the clearest story. People get money, people spend money.
The Tax Refund Surge
Trump’s “One Big Beautiful Bill” (signed July 4, 2025) cut taxes retroactively to January 2025. But the IRS didn’t update withholding tables until 2026. So workers overpaid for six months.
Result: $100-150 billion hits 110 million households in February-March. That’s $1,000-2,000 extra per household on top of normal refunds.
My Singapore reality check: I live in Singapore. When the government hands out $300-500 vouchers, retail and restaurant sales bump 5-15% during redemption periods. It’s not explosive growth—it’s modest acceleration. Singapore distributed $238 million in vouchers, got $313 million in GDP impact (0.05% of GDP).
I’m expecting the same in the US: modest acceleration (maybe 1-2% more consumer spending), not an explosive surge. But modest is enough when you’re concentrated in the right sectors.
Where the money goes:
- Online shopping, retail stores
- Restaurants, dining out
- Hotels, travel
- Movies, entertainment
- Cars (especially with cheaper financing)
Rate Cuts Make Big Purchases Easier
Powell’s term ends May 15, 2026. Trump will pick someone who wants rate cuts before midterms. Market expects 1-2 cuts in 2026.
Lower rates = cheaper car loans, cheaper furniture financing, cheaper credit cards. When financing costs drop, people buy more stuff.
The risk: Tax refunds plus rate cuts could overheat the economy and push inflation higher. December 2025 inflation was 2.7%—above the Fed’s 2% target but manageable. If core inflation trends above 3%, the Fed won’t cut—or might even hike. That would hurt consumer discretionary (people stop spending when credit is expensive). Defense and construction still work (corporate tax cuts don’t need low rates), but I’d rotate out of consumer plays into more industrials/defense. I’m watching monthly CPI data closely.
Cheaper Gas Frees Up Cash
Trump’s Venezuela play (captured Maduro, controlling oil sales) might push oil prices down if the US rebuilds their production. Venezuela produces 920,000 barrels/day now, used to do 3 million.
Lower gas prices = $50-100/month back in people’s pockets. They spend it on retail, dining, entertainment.
Industrials: The Double Winner
Industrials benefit from BOTH consumer spending (people travel more) AND corporate tax cuts (companies buy equipment).
Defense: The Obvious Winner
Trump proposed increasing defense budget from $901 billion (2026) to $1.5 trillion (2027). That’s a 66% jump.
Why? Venezuela intervention. Board of Peace (his UN alternative). Pushing NATO allies to 5% defense spending. He’s building a “Dream Military.”
Defense contractors get:
- Immediate R&D write-offs (used to amortize over 5 years)
- Trump’s January 2026 budget proposal = massive DoD contracts
- Geopolitical tension = more weapons orders
Construction: The Sleeper
Here’s the kicker most people miss: Trump’s corporate tax bill gives companies a massive cash incentive to build factories NOW.
If you build a $100 million factory, you used to deduct $2.6 million per year for 39 years. That’s $546,000 in tax savings per year.
Now? You deduct the entire $100 million in Year 1. That’s $21 million cash back immediately (at 21% corporate tax rate).
Companies that were on the fence about building new facilities now have a huge financial reason to BUILD NOW:
- Intel builds 3 semiconductor fabs instead of 1
- Defense contractors build new weapons manufacturing plants
- Chemical companies expand refineries
This drives massive construction demand:
- New manufacturing plants
- Defense facilities
- Industrial projects
Plus, lower interest rates make construction financing cheaper.
Airlines: Fuel Cost Play
Tax refunds → people book flights (Q1-Q2 travel surge).
But the bigger story: jet fuel is 20-30% of airline costs. If Trump’s Venezuela play works and oil drops $10/barrel, airline margins expand 2-3 percentage points. That’s huge.
Machinery & Equipment
Same cash incentive applies to equipment: buy a $10 million production line, get $2.1 million cash back immediately (instead of $300,000/year for 7 years).
Companies accelerate equipment purchases because the immediate tax savings make upgrades affordable NOW. More demand for industrial machinery, automation systems, manufacturing equipment.
Health Care: The Two-Part Story
Health care gets two benefits: consumer refunds drive elective procedures, corporate tax cuts help device makers, pharma, and biotech.
Tax Refunds → Elective Procedures
When people get $1,000-2,000 refund checks, they schedule procedures they’ve been delaying:
- Dental work
- LASIK
- Elective surgeries
- Medical devices (hearing aids, etc.)
It’s not as immediate as buying a shirt online, but it’s still discretionary spending that increases with cash in hand.
Corporate Tax Cuts Help Device Makers, Pharma, and Biotech
Hospitals buying a $3 million MRI machine get $630,000 cash back immediately (instead of $90,000/year for 7 years). Same for CT scanners, surgical equipment, hospital IT systems.
The immediate cash savings accelerates hospital equipment upgrades and medical technology purchases.
Pharma and biotech companies get immediate R&D expensing instead of amortizing over 5 years. Developing a new drug costs $50 million in R&D? Get $10.5 million cash back Year 1 instead of $2.1 million/year for 5 years. For biotech companies that spend 80-100% of their budget on R&D, this is massive.
Plus, lower rates make hospital financing and equipment purchases cheaper.
Final Thoughts
Markets are choppy, but that’s noise. 2026 looks good.
I’m counting on you, Trump.
Stock picks coming soon. Subscribe to follow along.
This post reflects my personal investment strategy for 2026 and is not investment advice. All figures are based on publicly available economic forecasts and policy announcements as of January 2026.