This year’s stock market is a head-scratcher. The US economy is healthy…but investors have preferred overseas markets. The S&P 500 reached all-time highs, even as stocks seesaw wildly. A basket of the Magnificent Seven tech giants recently lost 11%…yet chocolate-bar maker Hershey has soared 29%. Meanwhile, Wall Street is facing a mounting list of questions about artificial intelligence (AI)…the path of US interest rates…geopolitics in the Mideast and Ukraine…and the fall-out from US tariffs.
Much changed after the start of the war in the Mideast, says top fund picker Janet M. Brown. What went up the most in the months preceding the war—among stocks, commodities and currencies—fell the most as investors pulled back.
Major international benchmarks have tumbled since the initial attack on Iran in late February, while US indexes have suffered milder losses.
As the Iran war disrupts supplies and drives up prices, Asian and European countries are rolling out measures to cut energy use.
Markets are suddenly trying to recalibrate and figure out how long the war is going to last. Some believe the dynamics that made international stocks attractive at the start of the year will return once the Iran war is resolved.
To help you navigate this shifting, uncertain environment, Bottom Line Personal asked Brown to identify the most prominent trends likely to affect the stock market for the rest of the year, as well as the mutual funds and exchange-traded funds (ETFs) that she favors as part of a diversified portfolio.
Which funds you select for your portfolio often depends on what type of investor you are…
Aggressive: You can handle sharp up-and-down spikes in performance.
Moderately aggressive: You are comfortable with funds that have volatility similar to the broad market.
Conservative: You have low tolerance for volatility or worry that the stock market could stumble this year.
Four Key Trends to Tap Into Now
Investors are pivoting to mature companies that make low-tech, real things. This is known on Wall Street as Hard Assets/Low Obsolescence (HALO), explains Brown. Tech and digital-oriented stocks have been replaced as market leaders by more stable, slower-growing companies associated with the physical and analog world. Think oil and gas, electricity, food, heavy machinery and real estate. Reasons: AI cannot disrupt or render these industries obsolete in the way that it may affect asset-light businesses such as software firms…and the AI capital-spending boom is likely to boost demand for real-world products and services.
Overseas markets shine, especially emerging markets. The US Dollar Index—which measures the dollar’s value against a basket of major currencies—slid 4.18% over the past year. A weaker US dollar means foreign stocks, priced in local currencies, boost returns in dollar terms for global investors. It also eases debt-servicing costs for governments and companies that borrowed in dollars, improving their financial conditions. In addition, valuations for foreign stocks remain far more attractive than those of their US counterparts.
Global military buildup is gaining momentum. While this area of investment isn’t right for every investor, Europe and other nations are re-arming themselves, turbocharged by an increasingly fractured world. With the demand for drones, fighter jets, warships and missile systems, military expenditures are seeing their steepest rise since the Cold War. Global defense spending is projected to grow at a 5% annualized rate, reaching $3.6 trillion by 2030.
Gold continues to glitter. The price per ounce of gold surged more than 60% in 2025—that’s the biggest price jump since the late 1970s. And the price can continue to rise because of the heightened demand for safe-haven assets. Central banks around the world view US Treasury bonds as increasingly risky because of large fiscal debts in the US ($39.1 trillion). They are buying gold as an alternative store of value for their reserves.
Mutual Funds for Aggressive Investors
The following types of funds focus on narrow slices of the stock market. For investors who can handle sharp up-and-down spikes in performance, they have potential for some of the better gains in 2026, according to Brown. Some of her favorite aggressive stock funds now…
Global X Defense Tech ETF (SHLD) seeks targeted exposure to companies that benefit from the increased adoption of defense technology ranging from cybersecurity systems to next-generation military hardware. The fund owns 50 stocks including Lockheed Martin and German weapons-maker Rheinmetall. The fund returned 74% last year. Expense ratio: 0.50%. Performance since 2023 inception: 53%.
iShares Latin America 40 ETF (ILF) passively tracks a benchmark made up of 41 of the largest and most liquid companies in Latin America. Top holdings include Brazilian miner Vale and Mexican financial-services giant Grupo Financiero Banorte. Emerging-market stocks in Latin America are rallying strongly due to a wealth of commodities exposure…very low valuations, which makes them appealing to value-focused investors…and government reforms that are boosting confidence in longer-term economic prospects. Expense ratio: 0.47%. Performance: 7.99%.
SPDR Gold Shares Trust (GLD) holds physical gold bullion, which is stored in vaults in New York City, London and Zurich and audited regularly. Each share represents one-tenth of an ounce of gold in the Trust’s holdings. The share price moves in close alignment with the price of gold bullion. Shares trade like a stock, which lets you buy and sell them through your brokerage accounts and IRAs without the hassles of owning actual gold. With $152.3 billion in assets, the Trust is liquid enough to make it easy to trade large orders. Expense ratio: 0.40%. Performance: 13.4%.*
Note for small investors: Consider the SPDR Gold MiniShares Trust (GLDM) instead. Each share represents one-hundredth of an ounce of gold, making it more accessible for small purchases and dollar-cost averaging. It’s also has an annual expense ratio of just 0.10%. Five-year performance: 21.7%.
Mutual Funds for Moderately Aggressive Investors
If you are comfortable with funds that have volatility similar to the broad market, consider these diversified funds that hold high-quality companies and can serve as core long-term holdings in your portfolio. Some of Brown’s favorite modestly aggressive stock funds now…
AMG Yacktman Focused Fund (YAFFX). This actively managed fund invests in a concentrated portfolio of about 50 large-sized companies with strong free cash flow and low debts whose stock prices are depressed due to earnings shortfalls and other temporary problems. It prefers well-known domestic and international names that dominate their industries such as U-Haul Holding Co., PepsiCo and South Korean automotive-parts manufacturer Hyundai Mobis Co. The fund is willing to hold large amounts of cash if it can’t find investments that meet its strict valuation criteria. Expense ratio: 1.25%. Performance: 12%.
First Trust Dow Jones Global Select Dividend Index ETF (FGD) tracks roughly 100 high-quality developed-market stocks based on high dividend yields. Top holdings recently included Hyundai Elevator Company and Robert Half. It is best for investors looking for higher dividends than you get from the S&P 500, as well as both US and international exposure. Recent dividend yield: 6.7%. Expense ratio: 0.55%. Performance: 9.2%.
Schwab Fundamental International Equity ETF (FNDF) uses a “smart-beta” strategy that departs from traditional market-capitalization weightings. Instead, it selects and weights holdings in its 900-stock portfolio by fundamental financial metrics such as sales, cash flow and dividends plus buybacks. The fund keeps one-third of its assets in Japanese and British companies such as Shell PLC and Toyota Motor Corporation. It offers a lower expense ratio (0.25%) than its peers. Recent dividend yield: 3.3%. Performance: 10.6%.
Mutual Funds for Conservative Investors
If you have low tolerance for volatility or worry that the stock market could stumble this year, Brown recommends these funds to provide ballast to your portfolio. They offer a variety of alternative and risk-management strategies from investing in commodities and currencies to owning corporate bonds. Some of her favorite conservative funds now…
Permanent Portfolio Fund (PRPFX). I favored this fund for 2025, and it proved its mettle, rising 28.8%. The fund, which is 60% less volatile than the S&P 500, invests in about a half-dozen asset classes that have little correlation with one another. That provides exceptional stability and consistent returns in all types of economic climates. The recent asset mix includes 35% US dollar and dollar equivalents…25% gold and silver…15% aggressive growth stocks…15% real estate and natural resources…10% Swiss francs. Expense ratio: 0.81%. Performance:10.7%.
Thompson Bond Fund (THOPX) uses a flexible bond strategy to vary maturities over time depending on market conditions, preserve capital and generate strong yields for shareholders. Ranked five stars by Morningstar, the fund recently had two-thirds of its portfolio in investment-grade corporate bonds with an average portfolio maturity under five years. Other assets are spread among US Treasuries and commercial and residential mortgage-backed securities. Recent yield: 5.14%. Expense ratio: 0.74%. Performance: 4.42%.
* All performance figures are 10-year annualized returns from Morningstar Inc. through March 30, 2026, unless otherwise noted.
