If 2025 taught us anything, it’s that economic coherence isn’t guaranteed. We spent much of the year navigating data that made sense individually but just didn’t reconcile when viewed as a whole. Labor markets weakened with rising unemployment, yet consumer spending held firm. AI capex ran hot while housing sat in recession. Policy alternated between posturing and action, creating broad uncertainty with occasional sharp interventions.
The result? An economic narrative that worked in pieces but broke down under scrutiny, leaving investors to parse signal from noise in an environment where traditional relationships stopped holding.
Looking Ahead to 2026: Rather than trying to make predictions, we’re thinking through three distinct pathways:
Consensus continuation - Labor markets stay weak but stable, housing bounces along the bottom, AI capex sustains momentum, and policy uncertainty recedes.
The AI to housing handoff - AI investment cools, financial conditions tighten, but rates fall substantially allowing cyclical sectors and housing to reignite.
Classic Slowdown - Unemployment marches higher, AI spending pulls back, consumer spending weakens, and rate cuts prove insufficient.
Portfolio Positioning: This year marked a unique transition point. The 2022-2024 period was about post-COVID normalization. 2025 was a setup year of sorts – a repositioning for what comes next. While we’re still working out exactly what the future holds, the evidence points toward a more defensive posture. So we’ve been shifting accordingly all year long – rotating out of cyclicals, consumer discretionary, and small caps while strengthening quality/defensive exposure. This has resulted in a higher turnover than we’re used to, but we’re now positioned for the next regime we see developing as the old one comes to a close.
In our latest Doxa Takes episode (link below), Chase sits down with Bloomberg Opinion columnist Conor Sen to work through what surprised them in 2025, what aligned with expectations, and why these contradictions matter for the year ahead. They walk through each scenario’s implications and the frameworks investors need to navigate what comes next.
Finally, as we close out 2025, we’re also marking ten years since we started Doxa Capital in 2015. It’s been an incredible journey watching the Doxa family grow, and we’re deeply grateful to everyone who’s been part of it. Cheers to the next chapter.
Please visit doxacap.com/insights/importantinfo for disclosures that apply to this post.
