In this first Q&A article from FundCalibre of 2026, Darius McDermott and Juliet Schooling Latter reflect on a year that challenged many investor assumptions. Despite geopolitical conflict, trade tensions and inflation concerns, markets delivered resilient and often surprising returns.
They discuss the broadening of performance beyond the US, the role of valuations and renewed interest in emerging markets and China. They also examine the resurgence of gold and commodities, the evolving role of real assets and whether AI remains a powerful growth story or a potential source of risk. They conclude with practical thoughts on diversification and investor behaviour for the year ahead.
Why you should listen to the interview: If you want clear, balanced insight into what really drove markets last year — and what matters most for investors now — this conversation cuts through the noise. It offers perspective on diversification, valuations, AI, real assets and how to avoid common mistakes when positioning portfolios for the future.
This interview was recorded on 8 January 2026. Please note, answers are edited and condensed for clarity. To gain a fuller understanding and clearer context, please listen to the full interview.
Interview highlights:
Market resilience and the danger of being “too clever”
“I think if you look back at last year and you can overlook those mad 10 days in April when the Liberation Day announcements came and then the sort of pausing of the tariff and saw a huge rebalance, you’d actually see a basically straight upward.
“The other, I think, observation, I think we’ll touch on it later is actually it wasn’t just the US last year — Juliet has mentioned Europe, but Asia, emerging markets, China, even the good old FTSE 100 had a very, very strong year outperforming the US. So it was really quite a broad spread.
“The one thing I think last year was a really sharp reminder of try not to be too clever. Markets do go down, markets do go up, but over time they go up. Now, if you are close to or needing your capital, then you should have less of an invested. That’s a simple rule. But if you are a long-term investor that regardless of age, you know, you don’t want access to your capital in the next three or five years. Staying invested is the right thing because if you, like a lot of people did, were very nervous, and you went into cash, then you would’ve probably been crystallising the fact that you missed out on that massive rebound.
“So staying invested, trying not to be too clever because markets can ignore all the things around them sometimes.”
US dominance, valuations and the case for broadening out
“US valuations were expensive at the start of 2025 and they’re even more expensive at the start of 2026. When you are priced on a PE of 50 and you’re expected to earn say 30 cents per share and you earn 35, great, but if you only earn 28, it’s only a minor miss, but it’s a profit downgrade and when you are on a very high PE, markets can react quite strongly against you.
“People were just starting to think, do I have to put all my investments in the US? Which if you’ve done that in the last 10 years, that has been the right call. But actually, people do need to consider other geographical areas maybe for new money as much as switching out of US equities within existing portfolios.
“Nobody I think in their right mind would say sell all your US equities, but it’s what do I do with this year’s or next year’s money? Am I still allocating in that same way as lots of people have done just buying US index?”
China, emerging markets and long-term opportunity
“For developed market investors, I think the dollar is a key issue. Emerging markets, a big part of the emerging market story is China. If you’re very negative on China, you may want less exposure. We saw quite a big re-rating in China last year, and it is definitely no longer as cheap as it was
China’s actually broadening out — it’s a global leader in EV batteries and EV cars, a global leader in a lot of healthcare areas. So I think very difficult to totally overlook the second biggest economy in the world.
“I still think emerging markets are a very strong bet, not just for 2026, but maybe for the next five to 10 years and it would be remiss of us not to mention UK smaller companies, one part of the market that is still cheap.”
AI optimism, risk and what could go wrong
“AI is such a difficult call to make, it has the capacity to provide enormous boost to productivity and growth but the CapEx being spent is eye watering, valuations are high, and these sort of long bull markets do often stall along the way. If there is to be a choppier road ahead, then quality investing, healthcare, those companies with pricing power could be a style that backs us up.”
Conclusion: While uncertainty remains a constant, the discussion reinforces that long-term investing is rarely about predicting the next headline, but about staying balanced, avoiding crowd behaviour and recognising where risks and opportunities may be mispriced. With valuations stretched in some areas and neglected elsewhere, thoughtful portfolio construction has never mattered more.
Main image: scottsdale-mint-XHikIfxVZdY-unsplash
