Most of you have probably seen the news.

The US just attacked Venezuela. We can only speculate what Trump’s exact motivation is. But it’s likely not just benevolence. And it likely has a lot to do with Venezuela’s resources. In fact, it’s one of the richest countries in the world when it comes to natural resources.

• Venezuela has significant, yet largely undeveloped, deposits of rare earth elements.

• Estimates show Venezuela has the 12th-largest iron ore reserves in the world.

• And most importantly, Venezuela holds hundreds of billions of barrels of oil reserves, one of the biggest in the world. However, much of this is heavy crude oil, which is far more expensive to extract because it’s harder to process and requires more advanced machinery.

• Not only does Venezuela hold oil, but it also holds a lot of gold. While gold is currently trading at all-time highs, many economies like BRICS have been stocking up on reserves.

We’ll likely find out more soon.

2026 is already off to a wild start. Whatever happens next, it’s clear that we’ll be in some rough waters this year. It’s also safe to assume that there will be plenty more surprises to come. So buckle up.

Volatility will definitely be a constant companion this year.

Interestingly, geopolitical events tend to be short-lived. Initially, markets sell off because of increased uncertainty, but historically, they recover quickly.

One thing to note, especially at the start of a new year, is that even during good years, corrections are pretty normal. The path isn’t just straight up. There are always drawdowns. Last year, the largest drawdown was 19%. And as you can see below 8–10% corrections are very common even in good years.

One thing I’m wary about is that everyone on Wall Street expects the market to just keep heading higher and continue rallying in 2026. They all seem to be in sync. Everyone is on the same side of the boat. But the market rarely does what everyone thinks. So expect the unexpected.

In fact, the average price target is 7,512, indicating a 9% expected return in 2026.

When compared to the average strategist implied gain in all years since 2000, which was 5.1%, Wall Street is actually very bullish relative to history.

2026 is a midterm year in the presidential cycle, which has historically been the weakest year of the four-year cycle. But…

Midterm years have tended to be much stronger when they occur during a second presidential term, such as Trump’s second term in 2026.

In fact, the sixth year of a presidency, like we’re going to have with Trump in 2026, has seen an average S&P 500 gain of 20.9%.

And as long as corporate earnings are doing well, the market will likely follow. Earnings are expected to grow again this year, at the highest rate since 2018, if you exclude the 2021 COVID recovery.

Since the S&P closed slightly down last month, it snapped its 7-month winning streak. This had to happen eventually. The good news, though, is that the market was higher 6 months later eight out of nine times. Bull markets don’t die easily. It takes a lot to bring them down.

Last year was pretty unimpressive for the Mag 7. Only Nvidia and Alphabet did well. The rest actually underperformed the market. So chances are we’ll see some reversion to the mean here. The next earnings season will be key. If they continue to grow or even accelerate, 2026 should be a good year for Big Tech.

All of this points to a choppy and volatile, but overall positive 2026. There is a lot of uncertainty this year from midterms, tariffs, and geopolitical issues. But on the flip side, we have AI, rate cuts, a potential IPO boom, quantitative tightening ending, deregulation, massive CapEx, earnings growth, and a pro-growth administration.

Big picture, the market still looks healthy. Rates are being cut, all sectors are positive, and valuations are not stretched. The bull market is still intact. For the market to really break down, something would have to change. A serious crack would need to form. We need to watch that carefully. But for now, it’s best to remain cautiously optimistic.