WHAT TO BUY, AND NOT BUY, IN 2026

THREE YEARS OF EUPHORIA IN STOCKS AND OTHER ASSETS HAVE INVESTORS BRACING FOR TROUBLE. HERE'S WHAT TO DO IF BAD NEWS ARRIVES.

- BY JEFF JOHN ROBERTS, BEN WEISS, AND ALLIE GARFINKLE

IT’S GETTING FROTHY OUT THERE. Pick any stock market metric, whether it’s the Nasdaq's closing price or a more technical measure like the Shiller P/E ratio, and the number will look unusually large. Throw in crazy AI valuations, for privately held startups and publicly traded stocks alike, and what we're seeing looks a lot like a bubble.

Perhaps this time is different. But note that phrase served as the ironic title of an acclaimed 2011 book by economists Carmen Reinhart and Kenneth Rogoff—a work whose subtitle is “Eight Centuries of Financial Folly.” In any case, if you're one of many looking at your swollen portfolio with a mix of glee and dread, it may be time to consider a rebalancing act.

This section of this year’s Investor’s Guide offers some ideas on how to go about that. We offer tips on how to play defense in the current stock market (spoiler: Candymakers are a sweet bet for sour times). We also devote some space to stocks that might be best held at arm’s length; whatever these companies’ ultimate fates might be, these aren’t the times or the prices at which to be a buyer. And for optimists, we have a preview of some buzzy rumored IPOs coming next year. Choppy markets can make for attractively priced debuts: Perhaps you will find the next UPS, which went public right before the dotcom bust, or Visa, which listed on the eve of the 2008 financial crisis. We'll also weigh in on gold and Bitcoin.

In the wake of Warren Buffett penning his final letter to investors, it feels fitting to say his most famous adage applies like never before: Be greedy when others are fearful, and fearful when others are greedy.

PLAYING DEFENSE: STOCKS FOR A SLOWDOWN