Why a Top Trader's 2026 Tips Matter for Your Passive Portfolio

You don't need to trade options like a pro to benefit from what a top trader knows. The real lesson isn't in the specific trades, but in the disciplined habits that built his success. For a passive investor, the takeaway is straightforward: consistency is your superpower, and the long-term planning behind his results is exactly what makes your strategy work.

Consider the track record. Marine veteran Erik Smolinski averaged 24.6% annual returns from 2018 to 2022 and posted triple-digit gains in 2023. That kind of performance is rare, but it wasn't built on a series of lucky short-term bets. His success comes from a rigorous, long-term planning process. He runs his trading like a business, with detailed plans, logs, and regular after-action reviews (AARs) to assess what's working and what needs adjustment. This isn't about chasing daily headlines; it's about having a clear, evolving strategy for where he thinks the world is headed.

So what does this mean for you? The key is consistency. Passive investors already do the hard work of putting your money to work regularly, often through automated contributions. That disciplined habit of dollar-cost averaging is a powerful force. The trader's process shows you need to stay on track with your own long-term plan. His advice to think about what the world will look like in three to five years is a simple but potent reminder to focus on the big picture, not the daily noise. It's a mental exercise that aligns your holdings with your long-term beliefs, whether that's around technology, healthcare, or broader economic trends.

The bottom line is that you don't need to trade like a pro to think like one. By adopting his principles of long-term vision and regular review, you reinforce the very consistency that passive investing relies on. It's about making your plan a living document, not a one-time setup. In a market that often rewards patience and penalizes panic, that's the most valuable tip of all.

Decoding the Three Principles: Adapting Habits for Passive Investing

The trader's three tips are more than just advice; they are a blueprint for a disciplined routine. For a passive investor, the goal isn't to trade options, but to adopt these habits to strengthen your long-term plan.

Principle 1: Think 3-5 Years Ahead
This is a mental reset. Instead of reacting to daily headlines, force yourself to ask: "What does the world need in five years?" For the trader, the answer is clear: AI. For you, it might be clean energy infrastructure, aging population services, or digital health. This exercise ensures your portfolio isn't just a collection of stocks, but a bet on the trends you believe will create lasting value. It shifts your focus from short-term noise to long-term productivity gains, like those analysts expect from AI investments in 2026. Your holdings should reflect that future vision.

Principle 2: Put Money to Work Now
The cost of waiting is real. Every day you delay investing is a day you miss out on compounding. The S&P 500's 16.4% gain in 2025 is a stark reminder of what can happen when you're on the sidelines. The trader's advice to not wait until 2026 to start applies equally to your monthly contributions. The power of your plan is in its consistency, not in timing the market. By putting your money to work now, you're automatically buying into the market's long-term growth, regardless of the year.

Principle 3: Review and Adapt Your Holdings
Your portfolio isn't a "set it and forget it" box. Think of regular check-ins like checking your car's oil. You wouldn't wait for a breakdown to see if the oil level is low, and you shouldn't wait for a market crash to see if your holdings still match your long-term beliefs. The trader uses after-action reviews (AARs) to assess what's working. For you, that means a simple annual review: Does your asset allocation still reflect your risk tolerance and time horizon? Have the companies you own changed their fundamentals? This habit ensures your portfolio doesn't drift from its intended course, just as a car runs better when maintained.

The 2026 Landscape: Where to Put Your Money

The market's setup for 2026 gives us a clear stage to apply the trader's three principles. The S&P 500 is projected to gain 9 to 11% next year, driven by earnings growth of about 12.5%. That's a solid, steady climb, not a speculative sprint. For a passive investor, this is the kind of environment where consistency pays off. The key is to align your holdings with this projected growth, using the principles as your guide.

First, think 3-5 years ahead. The consensus points to a world where AI-related productivity gains are a major driver. That's not a fleeting trend; it's a structural shift that will reshape industries over the next several years. Your portfolio should reflect that long-term view. This isn't about chasing the latest AI stock every day, but ensuring your equity allocation is positioned to benefit from the broad, durable efficiency improvements AI can bring to the economy.

Second, put money to work now. The market is already pricing in this growth. Waiting for a "better" entry point is a trap. The S&P 500's 16.4% gain in 2025 shows what happens when you stay on the sidelines. Your monthly contributions are your tool to automatically buy into this projected 2026 advance, dollar-cost averaging through any volatility. The power is in the consistency of your plan, not in trying to time a market that's already moving higher.

Third, review and adapt. The landscape isn't a smooth highway. Analysts warn of an unstable environment with ongoing sector rotations. While AI and M&A are key growth drivers, the market may churn higher with bouts of volatility. This is why your annual review is crucial. Check if your asset allocation still matches your risk tolerance. Are your holdings still aligned with the long-term trends you identified? For example, Morgan Stanley's recommendation to overweight U.S. stocks and equal-weight bonds provides a useful benchmark for that review. It suggests a balanced, growth-oriented stance, but your personal mix may differ. The goal is to ensure your portfolio isn't drifting from its intended course as the market rotates.

The bottom line is that 2026 looks like a year for steady compounding, not dramatic swings. By applying the trader's principles-focusing on the long-term trend, staying disciplined with your contributions, and regularly checking your alignment-you can navigate the inevitable churn and position your passive portfolio for the gains the market is projecting.

Catalysts, Risks, and What to Watch

For a passive investor, the path forward isn't about predicting the next headline. It's about having a few clear checkpoints to ensure your long-term plan stays on track. The market's projected climb in 2026 comes with its own tests, and your job is to monitor them without panicking.

The first major test arrives with the Q1 2026 earnings reports. These will show if the projected 12.5% earnings growth is real or just hope. Strong results would validate the core thesis for steady gains. Weakness, especially in key sectors like tech and AI, would be a red flag that the favorable backdrop is cracking. This isn't about timing a trade; it's about confirming whether the engine driving the market's projected 9-11% advance is still running smoothly.

The bigger risk to that engine is policy. The market is counting on a stable policy backdrop, but the current environment is described as unstable due to policy crosscurrents. Changes in tariffs, tax rules, or monetary policy could disrupt the flow of capital and consumer spending. For a passive investor, this is a reminder that your portfolio's performance is tied to the broader economic weather. You can't control the policy shifts, but you can acknowledge them as a source of potential volatility.

Your most practical tool for navigating this is the simple habit of regular review. The trader's after-action reviews (AARs) are a model for this. For you, that means using each quarterly check-in not just to see your balance, but to ask a key question: Does my portfolio still reflect what I think the world will look like in three to five years? If your long-term belief is in AI-driven productivity, are your holdings still aligned with that trend? If a major sector rotation occurs, does your asset mix still match your risk tolerance and time horizon? This isn't about making daily changes, but about ensuring your portfolio doesn't drift from its intended course as the market churns higher.

The bottom line is that 2026 will likely be a year of steady growth punctuated by volatility. Your job is to stay disciplined. Watch the earnings reports for validation, keep an eye on the policy landscape for potential headwinds, and use your regular reviews to keep your holdings in sync with your long-term vision. That's how you turn a trader's disciplined habits into a passive investor's practical edge.