As 2026 takes off, several trends are clear.
AI disruption is rampant, the economy uncertain, the Magnificent 7 stocks are lagging, weakness in the U.S. dollar continues, inflation is stubborn, emerging market and international stocks are moving, and investors are looking to hedge all of this by moving more into real assets as opposed to financial assets.
The dollar is the central issue. It has slumped about 10% over the past year despite factors that should support the currency: a strong U.S. stock market, a decent economy, consumer resilience, and higher interest rates in the U.S. than in much of the developed world.
The recent four-year low in the dollar is making international investors a bit nervous about the United States, where they have invested $36 trillion into stocks and long-term bonds.
Foreign holdings of Treasurys hit a record $9.4 trillion in November, but the pace of buying has slowed. Meanwhile, Beijing has been reducing its holdings of U.S. Treasury bonds over the last decade from $1.3 trillion to about $700 billion. China is the third-largest foreign holder of Treasuries, after Japan and the U.K. Japan is the top buyer, with $1.2 trillion. Foreign investors hold about 30% of total U.S. government debt.
Still, foreigners bought $689 billion in stocks in 2025 through November, according to U.S. Treasury Department data, up sharply from $197 billion the previous year. It estimates that foreigners own about 20% of the value of all U.S. publicly traded stocks.
But now capital flows seem to be going through Globalization 2.0 as flows expand to international markets and real assets.
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You may have noticed that the mainstream financial media is now preaching the newfound religion of international diversification. Last year, the MSCI all-country world ex-U.S. index surged 29% in U.S. dollar terms, posting its best performance in more than a decade and speeding past the S&P 500’s 16% gain.
Gold and silver have also been on a tear as investors seek a hedge to financial and political instability and risk. It is not just China’s central bank that is stockpiling gold. Chinese investors purchased over 400 metric tons of gold bars and coins in 2025, a 28% jump from the year before and nearly a third of global purchases in the retail category, according to the World Gold Council.
But in 2025, the Cabot Explorer looked beyond gold and silver to capture more exotic metals poised for explosive growth.
How Cabot Explorer Captured Even Better Returns in Real Assets
Supply and demand signals led us to believe that palladium and platinum will outperform as EV demand slowed and South Africa faces some production challenges. Platinum and palladium are usually considered rarer, more useful, and, therefore, pricier and more valuable than gold. There is 30 times more gold in the Earth’s crust than platinum, and in the early 1970s, platinum was five times the price of gold. Now, gold is three times the price of platinum.
But platinum wasn’t just cheaper than gold ... It was trading near the lowest discount to gold in history. By this, I mean the price of platinum divided by the price of gold for nearly four decades. We captured the relative price gap between gold and these critical minerals and captured the potential snapback – what analysts refer to as “reversion to the mean.”
Looking back, platinum usually traded for more than gold during the last three decades, and at times, the premium was significant, with platinum trading for more than double the price of gold in the early to mid-2000s.
That trend had largely reversed – bringing us to a discount that became extreme. The only other time we saw a similar situation was in 2020, when platinum traded for a 60% discount to gold, and then platinum rallied 121% over the next 11 months, while gold surged 25%.
The setup was similar for palladium. This critical metal had crashed even worse than platinum.
Believing that platinum and palladium were both poised for major moves higher, the Cabot Explorer recommended the Sprott Platinum and Palladium ETF (SPPP) in June 2025.
As we expected, SPPP more than doubled by the end of 2025.
Watching trends, comparing values, exploring the world for the best stocks and ETFs is what the Cabot Explorer is all about. Join today to protect and grow your portfolio.
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