Richard Weiss, chief investment officer of multi-asset at American Century Investments, believes that record US government debt, extreme stock market concentration, and the potential for small-cap stocks to catch up with large caps will be key drivers of investor strategy in 2026. American Century Investments is a global asset manager offering a range of investment strategies. The company aims to deliver long-term value to clients through active portfolio management.
Weiss identifies the growing US debt burden and rising interest costs as significant challenges. US government debt has surpassed US$38 trillion, more than double that of China, making the US the second-most indebted major economy relative to GDP, only behind Japan. As debt increases, interest payments are becoming one of the fastest-growing components of the federal budget, which could push long-term yields higher and negatively affect stock valuations.
According to Weiss, the US government’s reliance on short-term Treasury bills mitigates costs while interest rates remain low, but this approach becomes risky if borrowing costs increase. He cautions that suppressing yields could inflate cash in the economy, fuel inflation, and distort market signals, making it more difficult for investors to assess risk. Stock market concentration is another area of concern, with the 10 largest S&P 500 companies, most of which are in technology, now representing approximately 40 per cent of the index’s total value.
Weiss also suggests that small-cap stocks may present an opportunity, as the valuation gap between large and small companies is becoming increasingly difficult to justify. He advises investors to diversify carefully, understand the implications of the US debt cycle, and maintain investments across different company sizes and regions to navigate the market effectively.
