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To make sense of macro forces shaping the next cycle, we turn to our 7 Super Trends for 2026 and beyond – the structural themes that define the opportunities and risks ahead for a split-screen world marked by simultaneous strength and fragility, clarity and contradiction. or global investors. In previous posts, we looked at Super Trends 1 & 2, the rise of the rest and fiscal firepower. Last time we continued our outlook for 2026 with Super Trends 3 & 4, AI adopters and the revenge of the real economy. We’ll conclude out Outlook 2026 with Super Trends 5, 6 & 7, the Great Rebalance, currency cold war, and the safe haven shakeup.
After more than a decade of one-way traffic into U.S. mega-caps, market leadership is finally broadening. International markets, including Europe, Japan, and large parts of EM, now offer more attractive valuations, more supportive policy cycles, and broader earnings momentum than the U.S., where concentration risk has reached historic extremes.
This shift is not merely a tactical rotation; it is the foundation of the next market cycle.
The sectors positioned to lead – value, cyclicals, financials, industrials, resource producers – have spent years under-owned and undervalued. As the global economy becomes more balanced and geographically diversified, market leadership will reflect that balance.
Earnings cycles across Europe and Japan are strengthening, supported by currency competitiveness, healthier corporate governance, and improving domestic demand. EM Asia is benefiting from regional supply chain integration, rising consumption, and favourable policy settings.
The next bull market is unlikely to look anything like the last one. It will be more globally distributed, less concentrated in narrow tech leadership, and driven by a world where multiple regions contribute to growth simultaneously.
Investors anchored to the past decade’s winners may miss one of the most important turning points of the 2020s. Global diversification is again becoming a return driver – not just a risk management tool.
Investment Implications
Currencies are no longer passive reflections of economic fundamentals. They have become instruments of geopolitical strategy. The U.S. policy mix of tariffs, remittance taxes, capital flow restrictions, and punitive tax proposals effectively shifts adjustment costs onto foreign savers. These tools amount to a new form of economic statecraft that weaponizes the dollar’s centrality.
In response, countries across Asia, the Middle East, and Latin America are exploring alternatives. Bilateral trade settlements are rising, regional currency blocs are emerging, and reserve diversification is accelerating. While the U.S. dollar remains dominant, its supremacy is becoming more contested.
This shift is changing how currency cycles work. Historically, dollar strength or weakness could be explained largely through interest rate differentials or growth spreads. Today, geopolitics, sanctions risk, trade fragmentation, and national-security considerations are equally important.
For investors, currency exposure has become an active source of return as well as a hedge against policy divergence. EM currencies with improving fundamentals, credible central banks, and healthier external accounts offer opportunities not seen in years.
The currency landscape is fragmenting – and with it, the assumptions that underpinned the last 30 years of global finance.
Investment implications
Safety isn’t where it used to be. The traditional hierarchy is flipping. Many emerging market countries now boast healthier balance sheets, stronger external accounts, and more credible monetary frameworks than major developed markets. Meanwhile, Western nations are drowning in debt, fiscal deterioration, and elevated political uncertainty – features long associated with EM.
This challenges the oldest rule in the book: “Buy Western bonds for safety.” G7 government bonds and reserve currency assets can no longer be considered universally safe. Risks that were once neatly categorized by geography or income level are now far more dispersed. Resilience is emerging in unexpected places; vulnerability is appearing in old strongholds.
A striking divergence is also emerging in alternative stores of value. Crypto thrives on speculation – a liquidity-sensitive, high-beta expression of tech sentiment. Gold thrives on uncertainty – slow, steady, and historically reliable when policy appears unmoored. As monetary anchors weaken and geopolitical risks rise, gold’s role as an alternative currency and portfolio hedge is growing.
In a Split-Screen World, even safety must be redefined. The question is no longer “Is this market developed or emerging?” but “Is this balance sheet credible, is this policy framework stable, and is this asset insulated from political risk?”
The new safe-haven landscape requires a far more nuanced, global approach.
Investment implications
Tyler Mordy, CFA, is CEO and CIO of Forstrong Global Asset Management Inc., engaged in top-down strategy, investment policy, and securities selection. This article first appeared in Forstrong’s Insights page. Used with permission. You can reach Tyler by phone at Forstrong Global, toll-free 1-888-419-6715, or by email at tmordy@forstrong.com. Follow Tyler on X at @TylerMordy and @ForstrongGlobal.
Disclaimers
Content © 2025 by Forstrong Global. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited. Used with permission.
The foregoing is for general information purposes only and is the opinion of the writer. The author and clients of Forstrong Global Asset Management may have positions in securities mentioned. Performance statistics are calculated from documented actual investment strategies as set by Forstrong’s Investment Committee and applied to its portfolios mandates, and are intended to provide an approximation of composite results for separately managed accounts. Actual performance of individual separate accounts may vary with average gross “composite” performance statistics presented here due to client-specific portfolio differences with respect to size, inflow/outflow history, and inception dates, as well as intra-day market volatilities versus daily closing prices. Performance numbers are net of total ETF expense ratios and custody fees, but before withholding taxes, transaction costs and other investment management and advisor fees. Commissions and management fees may be associated with exchange-traded funds. Please read the prospectus before investing. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.
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