Bull Markets & The Improbable Investor

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It has come to our attention – and really, whose attention doesn’t it come to, these days? – that the market, that vast, self-organizing system of hope and mild panic, is being increasingly influenced by individuals. Not the grey-suited titans of finance, of course (they’re still there, mostly muttering about algorithms and leveraged buyouts), but actual, individual investors. People. The kind who might, given the opportunity, ponder the existential implications of a slightly overripe banana. (It’s a surprisingly deep subject.) This isn’t necessarily a bad thing, mind you. It simply means the collective wisdom of the crowd is now, well, more crowded. And, naturally, more prone to sudden, inexplicable shifts in direction. A bit like a school of fish, only with slightly more paperwork.

According to a recent survey – The CORP-DEPO’s 2026 Investor Outlook and Predictions Report, if you’re keeping score – a remarkable 58% of individual investors intend to buy more stocks in the coming year. A further 34% are planning to hold, presumably while contemplating the aforementioned banana. The younger generations – Gen Z and Millennials – appear to be leading this charge, which is either incredibly optimistic or deeply concerning, depending on your preferred level of cynicism. (We, as dividend hunters, lean towards cautiously optimistic. A steady income stream is, after all, a remarkably sensible thing to pursue.)

However, these intrepid investors aren’t entirely oblivious to the lurking shadows. They recognize, with a clarity that occasionally surprises even us, that the bull market isn’t entirely immune to…complications. Here, then, are the three biggest risks currently identified, as revealed by the aforementioned survey. Think of it as a sort of pre-emptive guide to not losing all your money. (Disclaimer: we cannot guarantee you won’t lose all your money. The universe is a chaotic place.)

Recession, Inflation & The Unavoidable March of Time

Topping the list of concerns – and really, it’s hardly surprising – are the twin specters of recession and inflation. A full 45% of respondents cited these as their primary worries. It’s a bit like being concerned about gravity, really. It’s always there, and ignoring it tends to have unpleasant consequences. Investors have been wrestling with these issues since, well, the pandemic, which feels like a particularly long and unsettling dream. The Federal Reserve’s rather enthusiastic rate hikes – over 5% between 2022 and 2023 – were, naturally, interpreted as a sign that economic doom was imminent. Raising interest rates is, after all, a bit like applying the brakes to a runaway train. It might work, but it’s rarely a comfortable ride.

This, in turn, led to the longest inverted yield curve in history – a situation where short-term bonds yield more than long-term ones. (Think of it as paying more for a cup of coffee today than you expect to pay for the same coffee a year from now. It’s illogical, unsettling, and generally a bad sign.) This has historically been a reliable indicator of impending recession, which is a bit like a weather forecast predicting rain. It doesn’t always happen, but it’s best to bring an umbrella anyway. The U.S. economy, however, remains stubbornly resistant to simple categorization, and recent data suggests that a recession is still a distinct possibility. (Which, for dividend hunters, means increased volatility and potentially attractive entry points. Always look on the bright side.)

Inflation, of course, has been a particularly persistent nuisance. In 2022, the Consumer Price Index – a measure of how much things cost – surged to 9%, triggering the Fed’s aforementioned rate-hiking frenzy. Since then, inflation has retreated somewhat, but remains stubbornly above the Fed’s preferred target of 2%. (It’s a bit like trying to herd cats. You can get them moving in the right direction, but they’ll inevitably wander off again.) Government shutdowns and presidential tariffs have further complicated matters, making it difficult to determine exactly where inflation stands and whether it’s actually heading towards a more manageable level. If inflation remains high and unemployment rises, we could find ourselves facing stagflation – a particularly unpleasant economic scenario that combines the worst of both worlds. (Think of it as a particularly bad cup of coffee. Bitter, weak, and likely to stain your shirt.)

The Labor Market: A Delicate Balancing Act

Roughly 37% of survey respondents also expressed concern about a weakening labor market, which, unsurprisingly, ties into the risk of recession. While recession technically relates to gross domestic product (GDP), consumer spending accounts for around 70% of that GDP. (It’s a bit like a very large cake. If people stop eating cake, the cake economy suffers.) In recent years, consumers have been draining their savings and accumulating debt, but a historically low unemployment rate has helped to keep things afloat. However, recent revisions to U.S. Labor Department data revealed that the economy added only 181,000 jobs in 2025. Excluding years of actual recession, this marks the weakest year of job creation since 2003. (Which is a surprisingly long time ago, when you think about it. Where did all the years go?)

If unemployment rises, consumer spending could dry up, potentially triggering a recession. (See the cake analogy above.) Ultimately, the market has several potential tailwinds this year, and has been grappling with these risks for some time. But these concerns still warrant close monitoring. (Especially if you’re a dividend hunter. We like to know where the opportunities – and the potential pitfalls – lie.) After all, in the grand scheme of things, the universe is a profoundly improbable place. And the market, well, it’s just a particularly chaotic corner of it.

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2026-02-24 16:22