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There isn’t any scarcity of doom and gloom across the prospects of the British financial system. However you wouldn’t know that from trying on the efficiency of UK shares.
Final yr, for instance, the FTSE 100 index of main UK shares moved up by round a fifth.
For a group of principally long-established firms in mature industries, that may be a pretty thrilling efficiency in my opinion.
So, might 2026 be one other classic yr?
The financial system and the market will not be the identical
Heading into the yr, there are a variety of ongoing causes for concern.
The UK financial system seems to be weak, world geopolitical dangers stay elevated and there are indicators of slowing shopper spending in lots of markets.
Then once more, the identical was true at this stage final yr – and the FTSE 100 nonetheless did properly. A weak financial system doesn’t essentially result in a weak inventory market, particularly within the short-to-medium time period.
On high of that, there are some potential grounds for optimism concerning the coming 12 months.
For instance, momentum has been constructing over the previous yr in direction of ending the Russian struggle in Ukraine. Some rising markets are rising handily. The tariff volatility of final yr might hopefully turn into a distant reminiscence.
From a optimistic angle, then, it could possibly be that 2026 does certainly transform an excellent yr for UK shares.
Right here’s my investing plan for 2026!
In actuality, we simply have no idea.
Nevertheless, that doesn’t change how I plan to spend money on the inventory market this yr.
Yearly, regardless of how properly the broader inventory market does, some particular person firms fare properly whereas others fare badly even when the financial system is using excessive.
There’s a distinction between the efficiency of a inventory market index and the way every particular person share inside it performs. That was true final yr – and it will likely be true in 2026 as properly.
That explains why, slightly than shopping for an index (for instance, by investing in an index tracker), I purpose to carry a well-rounded, diversified portfolio of what I see as high-quality shares purchased at engaging costs. Some well-known UK shares kind a part of that portfolio.
This yr, I count on to maintain doing the identical factor.
Down, however is it out?
One of many UK shares I purchased final yr utilizing that strategy is FTSE 100 brewer and distiller Diageo (LSE: DGE).
As a believer within the potential monetary advantages of taking a long-term strategy to investing, I plan to maintain holding Diageo throughout 2026 and past.
It had an terrible 2025. Now it has modified administration, however that doesn’t essentially imply it will likely be in a position to conquer the challenges dealing with it (and plenty of of its rivals).
These embody weak shopper spending on luxurious spirits immediately – and weakening alcohol consumption traits over the long run. Each assist clarify why Diageo shares fell in 2025.
However with its decades-long file of annual dividend per share development, the 5%-yielding UK share is engaging from an revenue perspective – if the dividend lasts.
And with its sturdy model portfolio, world distribution muscle, massively worthwhile enterprise mannequin and distinctive, iconic manufacturing websites, I stay optimistic concerning the outlook for the British drinks big.
