Eugenio Catone @CatoneEugenio: "The year is now drawing..."

Italy

The year is now drawing to a close and it is time to take stock. Performance for 2025 will probably be around 19-20%, slightly up compared to 2024. 2025 has been a very bullish year and I am satisfied with the results considering that the risk score has often been quite low (3-4). 2025 will be the third consecutive year with double-digit performance, made possible mainly by the AI boom. The US tech sector has driven the global stock market growth, and companies in the portfolio such as Alphabet, Meta, and Amazon have benefited greatly. Will this trend continue in 2026? I cannot know for sure, but my optimism is gradually waning. After years of strong gains and rather high valuations, I have reduced my exposure to this industry and am focusing more on the pharmaceutical sector (Novo Nordisk) and increased liquidity (BIL). I cannot know what 2026 will be like, but my expectation is that it will be a very volatile year, and I will need the right liquidity to take advantage of the opportunities that arise. I do not rule out further investments in tech, but valuations must fall, and not by a small margin. I am shifting my portfolio towards a more risk-off approach, and I believe you have noticed this from the low risk score (3). In my opinion, the biggest risk in 2026 is a return of inflation, even though the latest figures show a significant improvement. With expansionary monetary policy and a still very high fiscal deficit, I would not underestimate a second wave of inflation, which is why I have included Chevron in the portfolio. Energy prices are still low, but the geopolitical situation remains very tense. Keep an eye on the US-Venezuela situation. In general, what do I expect from 2026? I expect that a change in strategy compared to 2025 will be necessary, but clearly I could be wrong. AI could continue to surprise, and I would leave some of the gains on the table. However, 1/3 of the portfolio is still exposed to this sector, so I am not completely excluded from it. I simply preferred to hedge against a risk that I consider real. Beyond the issue of inflation, the valuations of some AI companies are completely off the scale in my opinion, and a correction is needed for the entire industry. Which company am I betting on the most in 2026? Clearly Novo Nordisk, the Danish pharmaceutical giant that accounts for 13% of the portfolio. The Wegovy pill was recently approved by the FDA, and Eli Lilly seems to be lagging behind on oral weight loss drugs. Novo Nordisk is definitely my biggest bet for 2026. I wish you all a happy 2026 and thank you for your trust. I will do my best to make 2026 the fourth consecutive year of double-digit returns. $NVO (Novo-Nordisk A/S SPONS ADR) $GOOG (Alphabet) $META (Meta Platforms Inc) $SPX500 $NSDQ100

Not investment advice. The author may have financial interests in the mentioned instruments.