In the latest episode of ETF spotlight, Ron Santella, CEO and CIO of Equable Shares breaks down why the year ahead could bring increased volatility and how investors can adapt.
00:00 – Introduction
00:00:21 – Current Equity Market Conditions
00:00:54 – Outlook for 2026
00:02:31 – Biggest Risks for Investors
00:03:35 – Volatility: Plan or Fear?
00:04:40 – Hedged Equity ETF Purpose
00:05:39 – Risk Management in Practice
00:06:44 – Downside Protection & Trade-Offs
00:08:08 – 2026 Market Outlook: Doom or Opportunity?
Transcript:
Caroline Woods
Joining me now, Ron Santella, CEO and CIO of Equable Shares. Ron, thanks so much for being here.
Ron Santella
Caroline, thanks for having me today. I’m happy to be here.
Caroline Woods
Well, happy to have you. We are nearing the finish line for 2025. How would you describe current equity market conditions right now? Ron?
Ron Santella
You know, I think it’s really been an extraordinary time. We think about it right. The the S&P has annualized it by 11% since 1970. But as of today it’s it’s up over 23% a year for the last three years. We’re now at the end of our third rate year in the market. So I think for equity investors they’ve been rewarded for being patient.
And it’s a great time to own stocks.
Caroline Woods
And will it continue to be a great time to own stocks in 2026. Will investors continue to be rewarded? What’s your outlook.
Ron Santella
So at Equitable Shares we tend to be market agnostic. But we’re not market indifferent. You know we look at what’s out there. And I think when one looks at the consensus right now most conditions are favorable for the equity markets. You know we we’re entering 2026 with consensus forecast being double digit growth for the S&P 500. Of course earnings are the primary driver of stock prices.
Monetary policy is likely to continue to be accommodative. And with a new fed chair coming in in 2026, that probably won’t change. I think fiscal policy will continue to be a tailwind for the markets. Expectations are that tax refunds will be great and expected early in the year. And of course, the one big beautiful bill, I think is generally favorable because corporate taxes are likely to go down next year.
And the AI trade seems to be real. I mean, there’s as you know, there’s there’s a substantial amount of CapEx. So look at it from that light. I think the stage is set for 2026 to perhaps continue what’s been going on for the last three years in the market.
Caroline Woods
Well, you you mentioned a whole lot of tailwinds there with the S&P 500 up 17% in 2025. And really only one and a half trading sessions to go here. Would you say that investors are underestimating risk or overthinking it at this point. And what is the biggest risk.
Ron Santella
Yeah. Well I think it’s a great question. And I think.
It’s easy to point to all the favorable conditions for the market. You know, by by definition, the biggest risk is usually the one you don’t see coming. That’s why one is surprised, right? But it wasn’t that long ago. If you just if you just rewind back to Q1 of this year, the market was down over 4% in the first quarter.
We had a period there in April when we were down over 19% in less than ten trading days. And so we still live in a world where there’s geopolitical risk out there. There is still inflation that could linger. It looks benign right now, but if inflation ticks up, that could be a factor for the market. And of course you know there’s no guarantee earnings hit there Mark.
So there’s always risk in the market and want to be mindful of that.
Caroline Woods
Okay. So on that note is volatility something investors should really just plan for or is it something that they should fear.
Ron Santella
Yeah I think. The important part of it what’s embedded in that question is one’s time horizon. I think trying to time markets is tricky, but patient investors normally view volatility as their friend. If if you can keep a level head through those periods sometimes are buying opportunities. There are time to perhaps shift your portfolio a little bit. So you know, generally I think, if one is a long term holder of stocks, volatility should not be viewed as an obstacle.
But I think if one is timing the market or riding trends, volatility reports of course create some uncertainty for those type of investors. And in any environment.
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