RZH Insights: Investment Optimism for 2026 and Beyond

2025 marked another year dominated by alarming, distressing and fear-driven headlines. A wall of worry was ever-present even though the stock market climbed nearly 18% 1 – an outcome that surprised most but was entirely consistent with my expectations. Over the years, many have asked me a version of the same question:

“Why are you always so optimistic about the stock market?”

It’s a fair question, especially in a world that feels perpetually unsettled. Markets swing. Headlines scream. Fear is amplified. Pessimism often masquerades as prudence. Optimism, on the other hand, is frequently dismissed as naïve.

But when it comes to long-term investing, optimism isn’t a personality trait –  it’s an acknowledgment of reality and…

OPTIMISIM IS THE ONLY REALITY for investing in the world today.

The Market Is a Forward-Looking Machine

The stock market is less a report card on today’s economy – rather it’s a living, breathing forecast of tomorrow’s world. And when you look at history honestly, one truth stands out clearly:

Human progress consistently outpaces our imagination and expectations.

Innovation rarely arrives in neat, predictable increments. It comes in waves – often faster, broader, and more transformative than anyone expects. The technologies that end up reshaping our lives and our economy are almost always underestimated in their early stages.

Why?

Because people tend to extrapolate the present rather than imagine what’s next. That gap between imagination and the present matters enormously for investors.

Innovation Is Chronically Underpriced

Most people are very good at seeing today’s problems and very bad at envisioning tomorrow’s solutions. As a result, innovation is almost always underpriced by the market before it becomes obvious.

Consider:

  • We struggle to imagine new products before they exist
  • We underestimate productivity gains before they compound
  • We discount breakthroughs because they don’t yet fit into familiar models

And yet, time and again, innovation redefines what’s possible – economically, socially and financially. The companies that ultimately drive long-term market returns are rarely the ones that look comfortable or are fully understood at the outset. They are born from experimentation, risk-taking, and relentless problem-solving.

Markets, like people, struggle to price what they cannot yet fully imagine.

This persistent underestimation of innovation is not a flaw – it is an opportunity. It is one of the primary reasons long-term equity investors are rewarded.

Volatility Is the Price of Progress

Short-term market volatility often reflects uncertainty about how progress will unfold – not whether it will. Innovation is disruptive by nature. It challenges incumbents, upends assumptions, and forces constant adaptation.

That process can feel chaotic in the moment.

But zoom out far enough, and the direction becomes unmistakable.

Over long periods, markets don’t move higher because conditions are calm.

They move higher because productivity improves, efficiencies increase, and human ingenuity continues to advance and solve problems. All of this leads to increased capital formation and eventual wealth creation.

Why RZH Remains Disciplined

At RZH Advisors, our philosophy is grounded in a simple but powerful conviction:

The future will be more innovative, more productive, and more capable than the present.

That belief isn’t blind optimism or wishful “Hope” – it’s an observation supported by centuries of evidence.

Trying to time optimism – to wait until a new idea or innovation feels “safe” or fairly priced – has historically meant missing the very returns that drive long-term wealth creation.

The greatest investment risk isn’t short-term volatility or uncertainty.

It’s failing to participate in progress or disengaging from the process when volatility (fear) spikes.

The RZH Perspective

As long as people continue to imagine, invent, and improve, the long-term case for equities remains intact. And as long as innovation continues to surprise us – as it always has – those willing to stay invested will continue to be rewarded.

That is why we stay invested.

That is why we remain disciplined.

That is why we stay patient.

And that is why optimism remains the most rational long-term investment strategy of all.

All of us at RZH Advisors are excited about experiencing 2026 with you and being amazed at what’s next!  May this year be your best ever!

Thank you, as always, for your continued trust and partnership. 

Carl J. Zuckerberg, CFP®, AIF®, CIMA®  

Principal, Chief Investment Strategist

P.S.  Fortunately, there are a continuous number of bold, imaginative, enterprising people thinking about the future. If you want to be inspired about what’s next, just click on a few of these links which highlight the best inventions and breakthroughs of 2025: 

[1] S&P 500 Index performance (Total Return including dividends) as measured from January 2, 2025, through December 31, 2025. Yahoo Finance. Investors cannot directly purchase an index.

Important Disclosures