January 2026 | Market Update for Our Clients

What Matters Now

As always, I want to start by thanking you for your continued trust in Forth Capital. It is a responsibility we take seriously, particularly in a global environment that is changing structurally.

Last year delivered strong returns across our portfolios, and that is of course welcome. But it is important to be clear. The conditions that drove much of the last decade’s market performance are no longer in place. Ultra low interest rates, abundant liquidity, and a technology boom belong to a different cycle.

We are now operating in a world of higher rates, persistent inflation, geopolitical tension, and rising debt. That does not mean opportunity disappears. It does mean that risk needs to be assessed more carefully, and capital needs to be positioned with greater intent.

Risk, Life Stage, and Portfolio Alignment

The single most important question for every client is not “Can my portfolio outperform?” It is “Is my portfolio appropriate for where I am in my life?”

Risk should align with your formal risk profile, but it must also reflect time horizon.

If you are within ten years of retirement, risk should already be reducing. If you are within five years, capital preservation becomes paramount. At that stage, avoiding a large drawdown is more important than chasing incremental returns.

Markets can and do move sharply. The role of sensible portfolio construction is to ensure that short term volatility does not derail long term plans, particularly retirement income.

As clients move through different life stages, the emphasis should naturally shift away from concentration and performance and toward diversification, resilience, and preservation.

This is exactly how we think about portfolio management at Forth Capital.

Currency Risk and the Reality of Cash

There are two things I can guarantee, not only for next year but for the years ahead.

Continued global uncertainty, and a continued loss of spending power in fiat currencies, particularly the pound and the dollar.

This is not a forecast. It is a structural reality driven by massive debt, expanding money supply, and the rising cost of servicing that debt.

For clients holding significant sums in deposit accounts or platforms such as Flagstone, it is vital to ensure FSCS protection is correctly structured and to remember that protection applies per banking group, not per account or per brand.

Beyond protection limits, cash is exposed to inflation risk, or inflation erosion, the silent tax that transfers sovereign debt to its citizens.

Gold as a Strategic Store of Wealth

In this context, we continue to see gold as a compelling alternative to excess cash. Not as a replacement for pensions or growth assets, but as a store of value.

Gold is treated as a reserve currency by central banks, including the UK. Gold has outperformed every major fiat currency over the long term, including the Swiss franc, the Japanese yen, and the Singapore dollar. Gold carries no counterparty risk. Gold can be held physically, and for UK tax residents, qualifying physical gold is free from Capital Gains Tax.

We expect gold prices to continue rising over time as confidence in paper currencies weakens and global uncertainty persists.

For clients holding large cash balances, reallocating into gold can materially improve the resilience of their overall financial position. We can assist with access to both physical and structured gold solutions, depending on individual circumstances.

For context, since the year 2000 gold has increased in value by approximately ten times. Over the same period, sterling has lost around forty percent of its spending power and the US dollar approximately fifty percent.

Uncertainty is not something to fear, but it does require preparation.

The coming years are unlikely to resemble the last ten. That is not a problem if portfolios are built correctly, risks are understood, and expectations are realistic.

If your circumstances have changed, or if you are approaching a new life stage, it is essential that your portfolio reflects that. Your adviser is there to guide you through those decisions.

As always, thank you for your trust, and here’s to a successful 2026.

Tom Tracy
Founder and CEO
Forth Capital Group