Four weeks in, 2026 is starting to shape up and show its cards. It’s going to be a mess. That is not a statement about stock market direction or the path of interest rates. It is about the news flow, the macro risks all around us, and the absolute urgency with which I believe all investors and traders need to focus on managing risk.
When I see social media posts focused on “how to get rich” themes, I want to simultaneously laugh and cry. When getting rich seems easy, that’s the exact time to focus on managing risk. Because the time to think about how to protect yourself is *not *when everyone is panicking. The whole idea is to have rehearsed and prepared for whatever may happen. Because, clearly, 2026 is a year in which anything can.
[Earnings, Tariffs and Other Key Things to…
Four weeks in, 2026 is starting to shape up and show its cards. It’s going to be a mess. That is not a statement about stock market direction or the path of interest rates. It is about the news flow, the macro risks all around us, and the absolute urgency with which I believe all investors and traders need to focus on managing risk.
When I see social media posts focused on “how to get rich” themes, I want to simultaneously laugh and cry. When getting rich seems easy, that’s the exact time to focus on managing risk. Because the time to think about how to protect yourself is *not *when everyone is panicking. The whole idea is to have rehearsed and prepared for whatever may happen. Because, clearly, 2026 is a year in which anything can.
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In meteorology, you have hurricanes, which are slow-moving and visible for days before they reach land. You also have** **tornadoes, which are sudden and localized. In 2026, we have both on the financial radar. Ignoring them isn’t bravery — it’s a failure of fiduciary duty to your own capital.
A hurricane is a high-probability event with a long lead time. You see it forming in the Atlantic (or, in our case, the Treasury market) days before landfall.
The Storm: This is the narrowness of the market. As of January 2026, the S&P 500’s concentration in just 10 stocks is at dot-com-bubble levels. We also see "Stagflation Lite" building, with inflation stuck near 3% and gross domestic product (GDP) growth projected at a modest 2.2%.
The Preparation: When you know a hurricane is coming, you don’t wait for the wind to rip off your shutters. You board up early. In your portfolio, this means diversifying away from the Magnificent 7. This year, the smart money is shifting from a 50/50 U.S./international split toward a 40/60 split to capture cheaper valuations in Europe and emerging markets.
A tornado gives you just minutes of warning. It’s a Black Swan event — a sudden geopolitical flare-up at Davos or a massive artificial intelligence (AI) earnings miss that triggers a flash crash.
The Storm: This is tail risk. It’s the $100 parabolic move in silver (SLV) or a sudden break of the 200-day moving average in tech.
The Preparation: You build a storm cellar. This isn’t about "timing the market." It’s about having what I would call a “convex hedge.” That’s where a small loss won’t create much defense in my portfolio, because I don’t need it. But if the proverbial storm pops up, the hedge starts as a defender, and becomes a profit-making weapon in a crisis.