What Should Investors Do in Volatile Markets? Expert Outlook for 2026 and Beyond

On Tuesday, 21st April we hosted a webinar chaired by Boring Money's Founder & CEO, Holly Mackay, with Marcus Brookes, Chief Investment Officer at Quilter, and Tom Stevenson, Investment Director at Fidelity International. We put reader questions to them on current volatile markets and discussed what investors can expect for the rest of 2026 and into 2027. Watch the full webinar below or read our highlights.

Please note there are some audio quality issues in parts of this recording — we apologise for this. We hope the conversation is still valuable.

What's the general sentiment right now?

Marcus Brookes is broadly positive but acknowledges the uncertainty around today.

Tom Stevenson pointed to the upcoming earnings season as grounds for cautious optimism, with Q1 profit growth forecasts currently standing at around 13%. History suggests final numbers tend to beat expectations, potentially reaching 15-16%. His main concern is stagflation.

Stagflation is a scenario where inflation bites and creeps up at the same time as growth is stalling. Things get more expensive, so consumers buy less, and the economy fizzles out.

Are AI and tech stocks in a bubble, and could they crash?

Marcus pointed out that tech stocks have pulled back from highs in 2025. He also thinks we need a more nuanced view and to dig deeper to find the more interesting tech plays, rather than just see this as a single homogenous sector. He sees AI as a potential tailwind for companies that own their own data, arguing that those who can apply AI to proprietary datasets have a significant competitive advantage, but a potential threat to SaaS providers like Workday and Adobe. He also flagged that the upcoming IPOs of Anthropic, OpenAI and SpaceX could bring £1–3 trillion of new equity to market and investors need to be ready to participate here if they want to.

Tom pointed to the fact that exposure to the US is a big part of investing in tech but:

In terms of preferred funds, Tom notes

(Editor’s note: To be clear, although Tom has access to the whole of market and Fidelity’s platform offer access to hundreds of funds, we should note that Tom works for Fidelity International and so the fund mentioned is an in-house product at Fidelity.)

Is gold still worth buying?

Gold has been a top performer over the last 12 months but has shone slightly less brightly recently, not behaving as such a safe haven in the Iran conflict, where it was more muted than some expected.

Tom noted that gold has historically been a strong portfolio diversifier, partly filling the gap left by bonds, which have become less effective as they have been moving in the same direction as shares. However, he advised caution: gold has run hard, from around £1,600 an ounce three years ago to a peak of £5,500, currently sitting around £4,800.

He suggested investors now looking for diversification

may need to look beyond just gold, either to include other precious metals or to other asset classes such as infrastructure.

As an example, the Fidelity Select list includes the International Public Partnerships Investment Trust.

Why aren't bonds working as a safe haven anymore?

Bonds have not been behaving as we would expect. Normally they move in different directions to shares. If shares are flying, bonds will not do so well. And vice versa.
Marcus explained the shift in the bond environment. Between 2022 and 2025, falling inflation meant that bond yields

came down and prices went up. Loosely speaking when inflation falls, so do interest rates. So, bond yields fall because they don’t need to pay such high rates to compete against cash and other places investors might put their money.

This, combined with economic growth powering equities

, meant that bonds and shares moved in the same (positive) direction. This period of disinflation is over, and we now have inflationary growth that looks set to rise. In an inflationary environment, bonds tend to behave less well.

Marcus is looking to other asset classes in this shorter-term environment where markets are volatile, and bonds are uncertain.

These hedge fund strategies include a Janus Henderson long-short fund and a JPMorgan long-short equity fund. Some of these options are opening up to retail investors, not just wholesale buyers like Marcus.

Tom also agrees.

Are gilts a good alternative to cash savings?

Holly flagged another potentially interesting, tax-efficient diversifier for retail investors: keeping cash in short-term government gilts

. These are effectively IOUs we make to the UK Government. We know they mature at face value (£100), so we can see how much we will make if we hold them until they mature.

She cited an example of a gilt maturing in January 2028, currently trading at just over £93. This will be worth £100 when it matures. So we’d get £7 back in this timeframe which translates to a yield of about 4%, with largely tax-free capital gains. This is a straightforward and tax-efficient option that some investors sitting on cash may wish to consider, particularly higher rate taxpayers

liable for paying tax on interest made in mainstream cash products.

Is the 60/40 portfolio rule still relevant for retirees?

The 60/40 rule is a traditional recommended split between equities and bonds, particularly for older investors approaching or in retirement.

Holly queried whether this is still an appropriate rule of thumb. She asked, “How do retirees balance that mix between growth, but also preservation of capital for when things get a bit iffy like they have this year?”

Tom’s view was that this progressively more cautious approach used to work in a world where people retired and bought an annuity.

He conceded that bonds still have a role, but you need to be specific about which type: government, corporate, high yield, or emerging market debt - depending on your view of the macro environment.

How should investors diversify in today's market?

Tom pointed specifically to infrastructure as an interesting diversifier, naming the International Public Partnerships Investment Trust (INPP) from Fidelity's Select 50 list.

Another vehicle which serves up diversification is a multi-asset fund

, especially one focused on generating returns in a variety of market conditions (an absolute return). Tom suggests Pyrford Global Total Return:

Marcus echoed the case for diversifiers and pointed to emerging market debt, particularly in China, as an example of how bonds are a broad asset class with lots of choices.

In terms of other emerging markets, he pointed out that Brazil – a net oil exporter – has had a good year.

Which geographical regions look most attractive to invest in?

Marcus flagged that Quilter had been underweight in US equities for a couple of years due to tech valuations but is now moving to close that at a more neutral position.

He also pointed to a supportive backdrop from the incoming Fed

governor Kevin Walsh, who is seen as more inclined to cut rates.

On emerging markets, Marcus was enthusiastic about the medium-term prospects for Japan, India and China. He was extremely positive about Japan and their new growth-focused government, but urged caution on India specifically, as several major family-run conglomerates which dominate markets can have other motivators driving them. He encouraged prospective investors to check that any gains in shareholder value actually flow through to them, rather than being captured by those in control.

He cautioned against using passive funds

in emerging markets:

He also highlighted governance questions as a reason to favour more investigative active funds. Marcus uses Allspring for emerging markets exposure and likes JP Morgan’s India fund as a solid active option.

Tom is extremely positive about Japan.

The economy is opening up, M&A is becoming easier, and the yen has depreciated so there is a competitive advantage for exports.

What is the stock market outlook for the rest of 2026?

Marcus is positive.

Tom is also cautiously optimistic.