What Traders and Investors Should Know - (2026 ETF Report)
A warm welcome to 2026. I'm Ronda Ley with ETF Guide, and I hope your new year is off to a strong start and hopefully you had some time to decompress, relax, and recharge your batteries. For this particular episode, I want to focus on what's occurred in 2025. I want to look ahead to 2026 and give you my weather report or my weather forecast, not just for the ETF marketplace, but for the overall investing trends and trading trends that I see. So, let's get right to it and give you a couple charts, beginning with the big picture view of what's been going on in financial markets.
If you're like Rip Van Winkle and you went to sleep for 20 years and you just woke up, here's what's going on. You've got the S&P 500 as measured by SPY, that's the ETF that tracks it, gaining almost 18% in 2025, which was an outstanding performance. Now, you take a look at that line that represents it, that black line, at one point in the first half, we saw S&P 500 stocks down. So, what a massive reversal. We saw it down as much as 18% and swinging to the upside since that point and ending the year on a positive strong note. We didn't see a little bit of choppy performance in December, but overall good things happening in the stock market. We'll take a look at it from a sector perspective in a second.
Some of these other major asset classes, commodities also performed strongly: gold, silver, precious metals. Don't forget about platinum, which performed outstanding and I think even better than gold itself. But precious metals have been lifted or have lifted the entire commodities group. And of course there's some other commodities like copper that have performed strongly. That group continues to do well. And then some of these other areas, what we might call the second tier performers, global real estate and US bonds delivered pretty respectable returns. When you add in the dividends and income payments on top of the return that you see here, around 7% plus you add those dividends and income payments, you're looking at probably 10 maybe 11% in terms of total returns. So pretty decent performance for 2025 from those two areas.
And then the lone underperformer was Bitcoin, which was down modestly about 6 and a half percent, not a disastrous return. Of course, it might be a disaster if you bought at the top, right? You're down maybe 40, 45%. But again, Bitcoin as a whole, if we look at it on a larger scale over the past, let's say, three, five, 10 years, it continues to outperform all major asset classes. It's got to have a little bit of a breather. I mean, come on, give me a break, folks. You can't have the 500% returns every year. S&P 500 industry groups performed strongly in 2025. We had eight out of 11 sectors up double digits. But take a look at those leaders, technology, industrials, and communication services. Those were the top performers, all gaining above 20% and very, very strong performance, which speaks to the broadness of the overall gains within the S&P 500. That's what you want to see from a sector perspective: broad participation by all sectors. Now, we did have a few laggards from consumer staples to real estate and consumer discretionary, but again, not enough to drag down the overall performance of the S&P 500. So, that's your big picture view.
Let's take a look at to 2026, my weather forecast or weather report, things that I'm watching that I think you should be aware of. First of all, AI, artificial intelligence, which has been in the headlines everywhere, has been mostly concentrated on those mag seven stocks, those mega caps, companies like Google and Microsoft and Apple. So, next year or the next layer rather of what we call AI maybe 2.0 or 3.0 is now shifting away from these mag 7 concentration. Now we've got these memory producers. We've got these connector companies. We've got these data center infrastructure supply. They are the next beneficiaries of this massive AI infrastructure roll out and build out that is a multi-year trend. It's not a single year trend. And it's also it should be stated that some of the trends that I'm going to mention in my weather forecast for 2026, these are trends that started last year and in my opinion may likely continue into not just 2026 but even extending beyond that. So AI that's a big one.
And then physical metals, which you know you think you say to yourself, well, you know that that has nothing or no relevance whatsoever to the boom in AI. Well, you're wrong because physical metals are very much needed not just from an investment perspective, right? There's investor demand. Everyone's been talking about gold and silver. But if we take a look at metals from an industrial application perspective or what we call utility, what is the usefulness of the metal? Well, silver besides being a precious metal has usefulness. It has utility. So does gold and so does some of these other critical materials, these metals that are much in demand and much needed for all the things that are changing in our world. The global energy transition, the move to more electric, electric vehicles, solar, wind, how about nuclear power? You're going to need a heck of a lot of your uranium to make that happen.
And this is a great chart from our friends over at Sprott Asset Management, Sprott ETFs, of course, they've got the great ETFs that you can play each of these individual metals or critical materials if you want to focus or concentrate in a specific area. You can also approach it from a more diversified perspective. You can also have the help of active management in some of these areas. I'll have a link in the description section below to Sprott ETFs and you can link over for continued research on some of the underlying ETFs tracking some of these high demand metals. But this is a great chart because it shows you each metal or critical material and then the application from nuclear to electricity to electric vehicles and the bigger that dot is the higher the demand for that particular application and vice versa. The smaller it is the less use for that particular application. But this is a real nice illustration of how critical materials are very much reshaping the investment landscape and the energy landscape.
We continue to see upward pressure in commodity prices. This is due to a lot of different things happening, shortages. We see this for example in the copper market. They can only mine so much copper because the fact is is that they don't have enough mines. They need more copper and so this is putting upward pressure on commodities like copper also rare earths where we see global national hoarding specifically in China which controls that market and then of course inflationary trends which are also boosting commodity prices. We've also got electrification and nuclear power which is another major and massive trend. We see electricity demand going through the roof. It's not going down folks. It is increasing. Look at your energy bill. Most of it's probably electricity. And electricity demand is expected to increase over the next few years and decades. And so that's creating more demand for some of these physical metals that we were talking about.
What about nuclear? Nuclear is related to that because we're talking about power and we've got high growth countries like China and India leading the way in terms of building out their own nuclear power plant fleet. And right now China and India are going to account for over half of the world's reactors, nuclear reactors that are currently under construction and planned. And then we've even got some of these MAG 7 companies relocating some of their data centers and buying up land next to nuclear power plants because they understand the importance and the significance of reliable power that's on at all times, not intermittent power, 24/7 power and power that's strong enough for all of that high powered required density that's needed for all those AI data centers. I mean these are not just normal computers. These are high-powered computers that require a lot of programming energy.
And then the other thing here number five is the increased interest in safety strategies via inverse and buffered ETFs to offset market volatility. We've seen this really and we've talked about it on this channel. I've talked about it. The buffered ETFs which are designed to protect your downside and give you a performance gain up to a certain ceiling. And then you've got the inverse ETFs which are designed to increase in value when the market indexes decline in value. So both of these strategies offer some level of protection. I've even built an online course all about safety to help you understand how it works within your investment portfolio and why it's so crucial to have safety. All investors need safety. From new investors to experienced investors, those that don't have anything to lose to those that have a lot to lose because of the amount of money that you've accumulated over the years. Everyone needs to have safety as part of their investment portfolio. And that's what I call the safety principle. It's having a protocol and planning ahead before the trouble starts, not after and certainly not during. And so that course I'm going to provide you a link in the description section below and it's free. It's completely free to all of our viewers and you can register.
Number six on my weather report is ETF traders getting and wanting and staying focused on concentrated trades. This includes single stock ETFs and includes narrow equity baskets. What do I mean by narrow equity baskets? Well, here's a perfect example of that. Direction ETFs launched what they call are the Titans Sector ETFs. This is really, really interesting if you're into trading industry sectors and want
