Mohamed El-Erian, noted economist and capital market thought leader, posted a comment on X (formerly Twitter) challenging his readers to choose one word to describe 2025; and one word to describe 2026! As you can imagine, the choices were varied and El-Erian’s were Resilience for 2025 and Dispersion for 2026.
Within the context of the growing artificial intelligence (AI) paradigm, I asked ChatGPT the same challenge. For three separate requests I got three clever replies: Volatile, Unsettled, and Bifurcated. Curiously, for 2026 I only asked once and got the perfect answer: Uncertain! Let’s take them apart and see what lies behind those thoughts.
It is always easiest to look behind you to explain where you have been; looking ahead is much more difficult! So, characterizing 2025 as Volatile is a straightforward thought since the markets were up and down as expected. The S&P 500 started the year at 5,903 and got as low as 4,982 in April (due to Tariff Tantrum) and recovered nicely to many new all-time highs ending at 6,901 in early December.
A synonym for Volatile is Unsettled so it is hard to find a flaw in that thought. A nuance might be to think of the markets as uneasy or fragile in its direction; always climbing the topical “wall of worry”.
The last word for 2025, Bifurcated, also seems well-suited. As we all know, the markets are not homogeneous. Though the S&P 500 (IVV) is up +18.3%, other equity markets have varied a lot! International developed markets (SCHF) are up +30.9% and U.S. Value stocks (IVE) are up only +13.6%. Still great returns, but varied nonetheless.
Finally, entirely consistent with the investment philosophy of D&A, ChatGPT chose the word Uncertain to describe 2026. As readers of this blog well know, when someone asks me what I think the markets will do, I inevitably say, Beats Me! That’s precisely why we focus less on forecasts and more on building an investment strategy aligned with your risk profile—then sticking with it through whatever the markets deliver.