12 Ways to Invest Smarter in 2026

2026 could be the year you clarify your investing process, build confidence in your investing skill and improve your portfolio’s performance. There’s no single action or resolution that guarantees all three results, but there are steps you can take to evolve into a smarter and wealthier investor by year-end. Here are 12 to commit to in January.

1. Rebalance

Rebalancing is the process of restoring your portfolio to its intended composition. The amount of wealth you have in stocks versus bonds can change over time. This happens because stock prices rise and fall more dramatically than bond prices. “As investments gain and lose value, they become a larger or smaller part of your overall portfolio,” explained Jesse Blaise, vice president and financial consultant at Charles Schwab.

If you haven’t rebalanced your account lately, you likely need to. Stock prices, as measured by the S&P 500, are up more than 12% this year. They also rose 23.3% in 2024 and 24% in 2023.

That growth probably increased your relative exposure to stocks, maybe to more than your risk tolerance allows. You can remedy the over-exposure by selling some of your stocks and using the proceeds to buy cash or fixed-income funds.

2. Increase Investment Contribution

If you’re investing in a retirement plan, increase the contribution. If you’re occasionally buying S&P 500 index funds, automate those purchases and raise the amount.

Don’t overthink the amount of the increase. Start with a guess—say, 5%. You can always adjust it later. Remember to spread the increase across all your asset types, including stocks, fixed income and cash.

3. Assess Your Cash

Having enough cash on hand protects your investment returns, because cash is your first line of defense against financial emergencies. If you don’t have cash, you may end up reaching into your investment account instead.

Selling your investments prematurely limits your future compounding opportunities. Those lost gains can be significant. As an example, your S&P 500 fund holdings can double in value every 12 years. That assumes a 6% average annual return after inflation, in line with the index’s long-term performance.

4. Confirm Your Financial Goals

You make better investing decisions when you’re working towards specific, time-bound financial goals. And, your choices when, say, saving to buy a home in five years will be different than the moves you make to secure a comfortable retirement.

Reassess why you’re investing in 2026. The reasons may have changed, and so your strategy should evolve, too.

5. Confirm Your Allocation Strategy

Your allocation strategy is the targeted mix of different asset types, like stocks, bonds and cash. The mix you choose heavily influences the risk of your portfolio. An all-stock portfolio is high risk, while a 50-50 split between stocks and bonds is moderately risky.

Different circumstances can prompt a change to your allocation strategy. You might have new financial goals or life circumstances. Or, you may feel differently about risk than you did a year ago. It’s common to shift into a more conservative investing strategy as you age. That can involve less exposure to riskier stocks or stocks generally.

6. Evaluate Your Performance

How has your portfolio performed over the past year? When you review your numbers, compare them to similar benchmarks. If your performance is below an index with similar exposure, that’s a cue to identify the under-performing positions and replace them with more capable peers.

7. Subscribe to an Investing Newsletter

You can learn a lot from watching the ebbs and flows of stock prices. If you’re motivated to advance your investing skills, start by subscribing to an investing newsletter that summarizes financial market trends in straightforward, down-to-earth language. Commit to reading it as often as it arrives. You’ll be surprised how this easy task can build your investing confidence.

8. Listen to an Earnings Call

Listening to corporate earnings calls can also be instructive. Prepared comments from corporate leaders highlight important milestones and trends, while analysts’ questions dig into the finer details of a company’s performance and outlook. You can sense how confident leaders and analysts are in the company’s growth plans and learn what factors may limit growth.

Earnings calls can also expose you to the investing thought process from two perspectives. Corporate leaders share hints on how they prioritize their growth investments. And questions posed by analysts reveal their thinking as they develop a recommendation and price target for the company.

9. Pick a Stock

You don’t have to pick stocks to be a successful investor. A long-term index fund strategy can get you where you want to be financially. Still, the process of researching and selecting stocks can improve your investing mindset and skill.

Even better, you don’t have to put money on the line. You can pick a stock and a buy date. Then, track the position’s performance over time to see how the company performed over time.

To make this exercise more meaningful, write down your objective for the trade and how you chose the stock. If you are successful, you can repeat the performance. If you’re not successful, look for ways to improve your process.

10. Make a Contrarian Trade

A contrarian trade is a stock purchase or sale that contradicts the prevailing investing view. For example, if tech stocks are booming, the contrarian might reduce technology exposure in favor of something more mundane, like health care.

To practice this strategy, first identify a trend that seems unshakeable. Examples from earlier in 2025 include the rise of AI stocks and the increasing value of gold. Next, plan a small trade assuming the opposite of the identified trend. Continuing our example, what trades would you make if AI stocks and gold were declining in value?

The purpose of this exercise is to get comfortable with making investing decisions that run contrary to popular opinion. It’s harder to make money in the stock market if you limit yourself to whatever the masses are doing.

11. Automate Your Investing

Automated investing, where money is scooped from your account and invested without any work from you, has three main advantages.

• It removes emotion from the process. You are less likely to second-guess automatic trades, since they happen without any direct involvement from you.
• It implements dollar-cost averaging. DCA, as it’s known, is the practice of investing small amounts periodically rather than investing larger amounts less frequently. DCA spreads your average cost out over many transactions, so you’re less likely to be strapped with a high cost that limits your future gains.
• It ensures consistency. Consistent investments in quality assets over time makes you a wealthy investor.

12. Learn New Financial Metrics

Financial news and corporate earnings releases use many financial metrics, often without explaining them. The next time you see an unknown abbreviation, flag it and commit to researching what it means. Once you’re comfortable with your understanding of that term, move on to another one.

Ideally, you’ll pick terms you see in stories about companies you follow. But if you need some inspiration, start with financial statement accounts like revenue, operating expenses, profits and earnings per share. You can then tackle profitability ratios, like gross margin and operating margin. Valuation ratios like price-to-earnings, price-to-sales and PEG ratio are also useful to know.

New Year, New Habits

Taking control of your financial future begins with a few new habits. Commit to building your investing skill now, so your future self can look back on this moment as your turning point.

By Catherine Brock, Contributor