Hey friends – we’re going to talk about our 2026 investment outlook today. But first – happy New Year!
I certainly hope that you had a wonderful holiday season. It’s such a magical time of year.
Here at the Withrow Estate, my daughter Maddie claims that we had the best Christmas ever. I love seeing the excitement in her and her brother Isaiah’s eyes when they walk downstairs on Christmas morning.
Maddie is eleven years old now… so I’ve come to terms with the fact that her lens on Christmas morning will likely change here in a few years. I have mixed feelings about that. But I’m learning to live in the present and cherish the moments as they come.
Speaking of moments, the kids got a drone for Christmas… and it’s pretty slick. This thing can fly up to 120 meters into the sky, which is about 394 feet. And it features a camera that can swivel to take some incredible pictures.
Here’s one the kids took of our property:
I’m amazed at how sharp this is. You can see the old red barn in the bottom right of the picture, and the original farmhouse to the left of it. The clouds are striking against the crisp blue sky. And it looks like there’s a little snow on top of the mountains in the background. That wasn’t evident when looking up from the ground.
We’re still learning how to operate the drone effectively… with an emphasis on not spooking the neighbors. But we plan to take this thing on some hikes in the area to capture more stunning pictures here in the new year. I’ll share those with you as they come.
And speaking of the new year, I’ve spent a considerable amount of time reading, thinking, and assessing the prominent trends that will feed into our 2026 investment outlook.
Why Real Assets Shine in the 2026 Investment Outlook
Of course, the financial news and the equity markets are still laser-focused on the artificial intelligence (AI) race, which entails the rapid build-out of massive data centers loaded with advanced technology.
Governments see this race as existential, and the companies involved are not going to stop pressing forward. They will continue to spend massive amounts of money on advanced technology like high-performance GPUs, custom AI accelerators, advanced semiconductor manufacturing equipment, and power-dense electrical infrastructure in their quest for AI supremacy.
While advanced AI is quite impressive from a technological standpoint, it’s still not clear to me what the business model is for those companies going all-in on it. It appears that their mindset is to crack the code of artificial general intelligence (AGI) at all costs, and then to ask the AGI what the revenue model should be to recoup all their expenses and repay investors.
At the same time, it’s clear that the Trump administration is going to push for lower interest rates and lower oil prices. Oil is already trading at a multi-year low, and the administration wants to see even greater production go online, which would push prices even lower.
As for interest rates, current Federal Reserve (Fed) Chairman Jerome Powell’s term is up in May. He will be replaced by an appointee who’s hand-picked by President Trump and Treasury Secretary Scott Bessent. And they’ve made it clear that the job title is to cut interest rates aggressively.
So we can be sure that larger rate cuts are coming. But remember, the Fed only controls short-term interest rates. Long-term interest rates have actually risen after the Fed’s last two rate cuts.
To my way of thinking, there are two sure-fire ways to get long-term rates down. One is to balance the federal budget… or at least come close. The other is to launch a new round of quantitative easing (QE).
My preference would be option A. And now that we’re seeing the depth of fraud embedded in the federal budget, it no longer seems like an impossible task.
Doge-father Elon Musk estimates that explicit fraud encompasses around $1.5 trillion in federal spending. If that’s in the ballpark, balancing the budget is largely just a matter of eliminating fraud.
Either way, lower rates paired with lower oil prices will be a major tailwind for several key asset classes.
Gold: In modern times, gold benefits as lower interest rates reduce the opportunity cost of holding non-yielding assets. We can expect gold to continue to push higher as short-term rates fall.
In addition, it’s evident that gold will be re-monetized in the coming years as a means of dealing with runaway sovereign debt. Gold has already eclipsed $4,500 an ounce and it’s only January. Surpassing $5,000 in 2026 seems like light work.
Bitcoin: Bitcoin also benefits from falling rates, which tends to push capital toward scarce assets – especially when monetary policy is easing. Similar to gold, there’s a lot of smoke that Bitcoin will be monetized within the financial system to serve as a means of reliable collateral in a world where global trade is being completely reorganized.
US mortgage notes: The Trump administration is hellbent on shoring up America’s housing market, and we’ll likely see Fannie Mae and Freddie Mac set free from their 17-year imprisonment in government conservatorship. This focus on housing will ensure that the climate for mortgage notes is accommodating.
Critical metals and minerals: And then there’s what may be the most explosive investment of 2026 – metals and minerals that are critical to the AI data center build. Silver, copper, and key rare earth elements sit at the heart of this effort.
Copper is essential for power delivery, cooling systems, and grid infrastructure. Silver is critical for high-efficiency electrical contacts and power management throughout data centers. And rare earth elements are indispensable for the high-performance magnets used in motors, cooling, and power-control systems that keep advanced AI hardware running at scale.
At the same time, these AI data centers require a massive amount of energy to run. That’s why nuclear power is suddenly back in vogue. And the fuel that powers nuclear reactors is uranium… which must also be mined out of the ground.
Direct investments in these critical metals and minerals stand to do very well this year. And the combination of lower interest rates and lower oil prices should be a huge boon for the mining companies working in the space as well.
So as we look at our 2026 investment outlook, it’s becoming clear that real assets are reasserting themselves as key economic and investment drivers. This supports my thesis that the Age of Paper Wealth ended in 2022.
If it holds, we’ll see a significant unwinding of mass-financialization and the gradual repudiation of Keynesian economic policies in 2026.
-Joe Withrow
P.S. We’re in the early stages of planning out our strategy sessions for the first half of the year. Our next one will focus on the Infinite Banking Concept (IBC) and how it pairs with some advanced investment strategies. I’ll let you know as soon as we have a firm date scheduled for it.