Omar Aguilar, CEO and CIO of Schwab Asset Management, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss today’s markets, including the influence of behavioral finance biases and global monetary and fiscal policy stimulus.
Aguilar notes that the global economy is shifting quickly to adapt to new trade policies. The US and European governments are highly stimulative in both monetary and fiscal policy. This stimulus provides a safety net to support growth, but investors must still consider the risk of higher inflation. Trade policies tend to impact an economy with a lag of 12 to 18 months, so the full impact might not be known until April to October of 2026.
Aguilar lists the four categories of behavioral finance that have been most demonstrated by investors in 2025. First is herding, or the fear of missing out (FOMO), which is demonstrated by the Magnificent Seven stocks. Second, there is a home bias, where investors overweight investments they are most familiar with, which are typically those in their home country. Younger investors often exhibit recency bias, where they overweight the most recent information regarding investments. Finally, investors seek out information that confirms their market views, which demonstrates confirmation bias.
Over the last decade, Schwab has seen excitement regarding ETF offerings. The move started into passive ETFs, then more recently accelerated into actively-managed ETFs. ETFs tend to have lower fees and greater transparency than actively-managed mutual funds.
Aguilar believes that US economic growth may continue in 2026, stimulated by the lower tax rates implemented in the One Big Beautiful Bill, and the Fed’s easing of monetary policy. Capital expenditures are likely to remain strong, driven by AI and technology spending, as well as tax incentives for new investments. Companies have solid balance sheets and are likely to continue to report strong profits. A challenge to growth may come from the K-shaped economy, where the top 20% of US consumers are doing great, while the bottom 20% are not doing well.
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