Your 2026 Investing Resolution: Change It or Pay the Price

As the calendar turns toward 2026, most investors will make the exact same resolution they always do: set it, forget it, and trust the market to do the work. Money will continue flowing into index-tracking ETFs, built on the belief that passive investing remains the safest and smartest path forward.

That approach worked well when markets moved in broad, rising waves. When growth was widespread, trends were durable, and most sectors advanced together, owning the index was enough. But that environment is fading, and in 2026, relying on it could become a liability.

Why index-tracking ETFs may not deliver in 2026

Markets are no longer moving as a single unit as leadership narrows. While some sectors are powering ahead, others are stagnating, and many are steadily losing capital. In this kind of market, passive exposure no longer offers protection and begins to dilute returns.

The performance gap already tells the story. An investor holding an ETF tracking the All Ordinaries is up around 5 per cent for the year, which is solid, but uninspiring. Compare that with investors who focused on where capital has actually been flowing. Materials are up more than 28 per cent, while Industrials have gained over 8 per cent. That difference is not chance; it’s the result of selectivity.

This is the lesson markets are already delivering as we move toward 2026: broad exposure is no longer enough. Stock picking really matters.

Passive strategies assume that tomorrow will broadly resemble yesterday. But many of the trends that carried markets higher are now mature. When those trends roll over, they rarely do so gently. Volatility does not treat all investors equally. It punishes those who are fully exposed, indiscriminate, and slow to adapt. In a passive portfolio, there is no sidestep; you absorb the full impact.

Why active investing will deliver stronger returns in 2026

Active investing, when done correctly, is not about constant trading or chasing noise. It is about recognising where capital is being allocated, where it’s being withdrawn, and which companies within leading sectors are genuinely delivering. It is about focus with discipline, not diversification for comfort.

Looking ahead, the market will reward investors who are prepared to be precise about sectors, entries and risk. The easy gains of simply owning “the market” are behind us, at least for now. What lies ahead is a market that separates preparation from complacency.

So, if there is one resolution that matters for 2026, it is this: stop outsourcing your thinking to an index. Learn to identify leadership, rotate with capital, and protect yourself when trends begin to fade. Because in 2026, doing what everyone else is doing may feel safe, but it may quietly be the most dangerous strategy of all.

What are the best and worst-performing sectors this week?

The best-performing sectors include Consumer Discretionary, slightly up 0.08 per cent, followed by Industrials, down under half a per cent and Real Estate, down over half a per cent. The worst-performing sectors include Energy, down over 5 per cent, followed by Healthcare, down over 4 per cent and Information Technology, down over 3 per cent.

The best performing stocks in the ASX top 100 include IGO Limited, up over 6 per cent, followed by Orica Limited, up over 4 per cent and Dexus, up over 2 per cent. The worst-performing stocks include Telix Pharmaceuticals, down over 13 per cent, followed by NEXTDC Limited, down over 10 per cent and Treasury Wine Estates, down 10 per cent.

What's next for the Australian stock market?

So far this week, the sellers have been in control of the All Ordinaries Index, pushing it more than 1 per cent lower by Thursday’s close. However, it was Thursday’s price action that proved most revealing about what may come next. Once again, the index tested the 8,850 level, which has now been tested four times in December, and each time buyers have stepped in with resilience to defend it.

As a result, 8,850 has clearly emerged as the market’s key battleground this month. It is the level that will determine the next major move. The roadmap from here is straightforward: hold above 8,850, and the market remains positioned to attack the 9,000 level; close decisively below 8,850, and 8,700 becomes the next major area where buyers are likely to step in and provide support.

Sector performance was broadly negative, with losses spread across the board. Energy, Information Technology and Healthcare were among the weakest performers. What makes this particularly interesting is that both Healthcare and Information Technology have now pulled back to price levels that previously launched strong multi-year rallies. That raises an important question as we look ahead: could 2026 be the year these sectors regain leadership?

The relationship between Information Technology and Healthcare only adds to the intrigue. Rapid advances in technology, particularly artificial intelligence, are revolutionising the health care space, linking these two sectors more closely than ever before. As a result, a sustained bounce from key historical levels in one sector could serve as an early signal for strength in the other. That’s why keeping a close eye on stocks across both sectors is critical, as this may represent one of the best opportunities in years to position for what could become the leading sectors of 2026.

For now, good luck and good trading, and have a fantastic festive season.

Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online.

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