Fondled Pump and Chips – A Grimm Tale

Once upon a time, we lived in a neater world where diversification, mathematics and economics governed stock markets. Not anymore.

In 2026, better strategies for investors have been following momentum, greed, personalities and the politically corrupt. Oh, and a side of chips with everything.

First to politics. This week, it was announced that Donald Trump earned more than $1 billion in 2025 from digital currency, share trades, real estate and even Kazakh mining. The US president is literally moving markets and openly profiting from the results. According to the FT, Trump made over 22,000 share transactions in 2025 compared to Joe Biden’s 13 transactions over 4 years. Following the Trump family seems to be a legitimate investment strategy in 2026. I’m surprised there isn’t an Exchange Traded Fund called President Fondled Pump, which just mimics his trades.

Momentum has also been a powerful factor in 2026. This is actually a legitimate strategy and never more powerful than today, as retail investors increasingly move markets in ways formerly reserved for the institutions. The basic idea is that things get on a roll and when the tide is rising, you follow it. Technology has obviously been the dominant momentum play of the last few years.

The precise flavour of technology is shifting – we now want chips with everything, as demand for computing power accelerates. This has seen a shift from the Magnificent Seven (Apple, Meta, Google, etc.) to those companies benefitting from their huge spending. Software is arguably out as infrastructure and hardware come in. Here’s a fun fact on the shift of power: semiconductors now make up about one-fifth of the S&P 500 and about 40% of the bonkers Korean Kospi index. (Now there is a momentum play…) We’ve covered the 2% fall of the Magnificent Seven this year as the S&P 500 has soared, and ask where to from here?

And finally, personalities also move markets as we follow the lead characters in our tale. Love him or loathe him, Musk gets interest, and his SpaceX IPO was going to make money at the outset as the world scrambled to participate in his story. Supply and demand are the core principles of Economics A-Level and (for retail investors) demand in 2026 is created by social media more than mathematical equations.

From the last chapter

If we look back at Q2 (or April – June) the MSCI World Index was up by about 14%, driven by a rally in the AI trade and Asian markets in particular. The Nasdaq was up about 20% for the quarter, whilst volatile commodities took a tumble. Oil fell by about 17%, gold by 13% and silver by around 20% as the Iran War faded from investors’ worry lists, and the strong dollar + expectations of higher interest rates took the shine off.

To the epilogue

Looking ahead, the word on the (Wall) Street is earnings. Expectations for profit growth are sky-high. According to Bloomberg, analysts expect that earnings will grow by about 25% over the next year across S&P 500 companies.

Stock markets are more Grimm Brothers than Disney and every tale has a dark twist. 25% growth in earnings is not possible on a continued basis. Anyone who runs a business knows this. At some point costs will rise, demand will fall, or profits will simply decelerate.

The epilogue to 2026’s Tale of Fondled Pump and Chips is that a big player in the US will come out and say they’re not using new technologies as much as they expected to. The new Chair of the Fed could (probably will) put interest rates up. Everyone will get the jitters and things will pull back sharply. But I don’t think we’re there yet. There’s an Anthropic IPO to get through first and more money on the table – and there are too many powerful people with too many vested interests to talk anything down.

I think that healthcare, defence and financials are interesting sectors to consider if you’re only stuffing your face with chips.

And the end

If the only two guaranteed things at the end of every story are death and taxes, this leads me neatly to the topic of Inheritance Tax. Last week, we ran a webinar with financial planning firm Ascot Lloyd to take your questions and consider our options for mitigating this tax for our kids. We have loads of helpful tips and ideas on this most difficult of subjects, and you can watch the webinar on playback.

Have a great weekend, everyone. It’s a sunny Friday in July and there’s a cold bottle of something in the fridge with my name on it. Hooray!

Holly