Can the U.S. stock market finish 2026 with a 4th consecutive year of double-digit gains?  We’ve got a long way to go to find out, but at least we are off to a promising start.

Note – the monthly percentages noted below are through 1/27/26.

In January, the S&P 500 rose 1.94%.  All but one of its sectors finished in the green for the month, too.  Some of its smallest market sectors led the way… Energy (+11.23%), Materials (+10.34%) and Consumer Staples (+6.95%).  Only Financials were in the red (-3.38%).

My Portfolio moved up in value in January with the markets, and my calculations show that I led the index by nearly half a percentage point.  I’ll take it!

Of my Top 10 holdings, half of them were in the green and the other half in the red, so that was a literal drag.  Still, it’s been a good start to 2026 for my Portfolio, and I hope that will continue.

I’ll be covering my usual items in this month’s Portfolio Thoughts post…

• Price Movement – I’ll look at my top advancers and decliners in my Portfolio during the past month.
• Top 10 Review – I’ll update my Top 10 Portfolio stocks and how they changed rank this past month.
• Weightings – I’ll examine the sector weightings within my Portfolio and let you know where I’ve made progress with regard to getting into my preferred weighting ranges.
• Watch List – I’ll share which stocks I’m looking at for possible purchase or sale in the event I decide to shuffle up my holdings.

Here are my Portfolio Thoughts for January 2026…

 

Price Movement

Note – my price changes cover closing prices from 12/26/25 to 1/23/26.

It was a strong month for stock gainers in my Portfolio.  The gainer/decliner ratio was better than 2:1 in January (for a 2nd consecutive month).  Of my 58 holdings, 40 rose in price, while 17 declined, and 1 was flat.  Nearly half of my gainers advanced more than 5%, so that was good to see.

Here were the stocks with the biggest moves to the upside and downside…

 

Of my 40 stocks that climbed in price in January, one moved higher by more than 20%.  Another 4 stocks posted a gain north of 10% (the usual threshold I monitor for).  To top things off, another 14 stocks gained at least 5%.

My top gainers in January were:

• Lockheed Martin (LMT), rocketing up 22.32%
• Starbucks (SBUX), surging 14.74%
• Lowe’s Companies (LOW), rising 13.19%
• Chevron (CVX), jumping 11.13%
• Cummins (CMI), popping 10.14%

 

My top gainers this month are highlighted by a pair of Industrials names (LMT & CMI) as well as a pair of Consumer Discretionary names (SBUX & LOW).

An increase in proposed U.S. defense spending moving forward, in addition to increased global demand due to rising geopolitical tensions, bolstered LMT in January.  The stock recently touched a new 52-week high just under $600.

Strong fiscal Q1 results allowed SBUX to climb in price during the month.  Comparable-store sales on a global front surpassed analyst expectations adding to optimism that the company’s turnaround plan is taking hold.

There didn’t seem to be any specific reason for the climb in the price of LOW.  It appears that general market sentiment and some sector-specific trends may have been the catalyst.  In any case, I was happy to see the move higher, as LOW had been hovering around $240 for the better part of the past 3 months, even establishing a 52-week low as recently as this past November.

A few different developments appear to be driving the price of CVX up.  Institutions have been increasing their position in CVX as analysts see earnings rising nicely in the next couple of years.  CVX recently completed their purchase of Hess, which should boost production in the coming years.  The company also had a new oil discovery of the coast of Nigeria, and there’s also the potential for expanded operations in Venezuela.

The last of my top gainers was CMI.  The advance by CMI in January pushed the stock to a new 52-week high.  Analysts have been pleased with the strong revenue and earnings posted by the company and have been raising their estimates.  Demand is also high for CMI’s backup power and energy solutions as it pertains to AI infrastructure and data centers.

Note – five sectors in my Portfolio had all their holdings in the green this month… Consumer Staples (4), Consumer Discretionary (3), Materials (3), Real Estate (3) and Energy (2).

 

Of my 17 stocks that retreated in price, none declined by more than 20%, which is nice.  However, there were 3 stocks that dropped in excess of 10%.  Another 4 stocks fell by more than 5%, too, but after that losses were fairly well contained.

My worst decliners in January were…

• Intuit (INTU), plummeting 16.64%
• Salesforce (CRM), tanking 14.29%
• Qualcomm (QCOM), sliding 10.86%
• JPMorgan Chase & Co. (JPM), retreating 9.21%
• Broadcom (AVGO), sliding 9.11%

 

Information Technology stocks dominated my top decliners list in January.  Four stocks from that sector made the list (INTU, CRM, QCOM & AVGO).

Software stocks were absolutely punished in January.  Investors are anxious over potential AI disruption to the traditional software business models.  Two of my software names topped my decliners list in INTU & CRM.  These two stocks were the two worst out of all my holdings this month… by a fairly wide margin.

INTU was trading in the $630-$680 range for the better part of 4 months before retreating in January.  Meanwhile, CRM had been trading in the $230-$270 range for more than 6 months before touching a new 52-week low this month.  CRM was the top gainer last month… how quickly one can fall.

After a nice 9-month climb from $130 to $180, QCOM has given up over half that gain in just 3 weeks.  Investors are concerned about market share losses as Apple transitions to its own modem production.  In addition, QCOM is currently fighting weak smartphone demand, as well as investor concerns regarding the lack of a well-defined data center AI growth story.

A higher expense outlook is troubling JPM investors, even though the expenses are driven by strategic investments in technology and marketing.  The recent proposal to cap credit card interest rates at 10% has put a dent in JPM revenue prospects, too.  The recent acquisition of the Apple Card created some one-time charges in Q4’25 results as well.  I expect JPM should bounce back nicely in the coming months.  JPM went from a top gainer for me in December to a top decliner in January.

Lastly, there’s AVGO… my largest holding.  I never like to see AVGO on my top decliners list, as it seriously hampers my Portfolio performance.  Despite strong Q4’25 earnings, AVGO issued soft gross margin guidance for 2026, leading to a pullback in the stock price.  Unfortunately, the high-growth custom AI chips that AVGO developed (and which are driving revenue gains) have lower margins than the company’s other hardware and software.  Still, there’s plenty of AI-driven demand moving forward, so I expect AVGO to handle the negative trend without too much trouble.

Note – no sector in my Portfolio had all its holdings in the red this month.  That’s the first time my Portfolio has achieved that feat in many months.

 

Top 10 Review

Movement in my Top 10 had a noticeable pickup compared to previous months.  Only 3 of the Top 10 managed to hold the same spot they had at the beginning of the month.

In addition, I had one new company crack the Top 10, which obviously led to one falling out.  We’ll get to that in a moment.

The largest climb up was two spots from one of my holdings, while the largest drop was four spots from the stock that fell out of my Top 10.

Performance-wise, 5 of my Top 10 stocks finished in the green in January, with the remaining 5 stocks in the red.  Lowe’s Companies (LOW) and Caterpillar (CAT) led my Top 10 gainers, while Qualcomm (QCOM) and Broadcom (AVGO) paced my Top 10 decliners.  My top 4 stocks all declined in January.  With the Top 10 being split, the rest of my Portfolio performed well enough to drive the entire Portfolio into the green for January.

 

Despite its substantial decline of 9.1%, AVGO remained in my #1 spot.  Given its huge lead in weighting relative to my 2nd largest stock, AVGO staying in the top spot was no shock.

For the 2nd consecutive month, Aflac (AFL) and QCOM switched spots at #2 and #3, with AFL rising one spot and QCOM falling one spot.  Even though both stocks were in the red in January, the fall for QCOM was about 4 times as bad as that of AFL, thus AFL watched as QCOM fell below it in my Top 10 rankings, and now AFL has a decent grip on the #2 spot heading into February.

AbbVie (ABBV) held onto the #4 spot this month, despite its loss this month that approached 4.7%.  ABBV has now had negative returns for 2 months in a row after posting 5 straight months of positive returns in the back half of 2025.

I had a second pair of stocks switching places in my Top 10 in January.  Moving up a spot to #5 was BlackRock (BLK).  The stock gained about 3.8% in January, making it two consecutive months of gains.  Slipping a spot to secure #6 was fellow Financials stock Visa (V).  V lost over 8.1% this month, which led to it tumbling a spot.

My largest mover to the upside this month was Caterpillar (CAT).  On the back of its nearly 7.5% gain this month, CAT was able to climb two spots in the rankings to land at #7.  CAT has been red hot, rising in price for 5 straight months.

The last of my three stocks to hold their same position in the rankings was RPM International (RPM).  RPM gained a bit over 3.1% in January, holding on to the #8 spot. This makes it two months of gains in a row for RPM.

Fastenal (FAST) was able to climb one spot to #9 in my Top 10 rankings.  FAST gained about 5.6% in January, making it two consecutive months of gains in the process.

Cracking the Top 10 and laying claim to the #10 spot was former Top 10 holding, Lowe’s Companies (LOW).  LOW used its nearly 13.2% gain in January to vault itself into the Top 10.  This made it two straight months of gains for LOW, and allowed the stock to reach a 52-week high.

Pushed out of the Top 10 was JPMorgan Chase & Co. (JPM).  The more than 9.2% decline from JPM during January saw the stock fall from a 52-week high it set in December.

The stocks at #7 through #10 are tightly bunched in weighting, so expect to see some shuffling of these names by next month.

 

 

Now hovering outside my Top 10 are JPM and Nexstar Media Group (NXST).  Unfortunately, each is lower in value than LOW by more than $2K.  So, it may take a nice gain in February to help each of them reach the Top 10.

 

From the table above, my Top 10 holdings now comprise 41.52% of my Portfolio value.  This is a noticeable decrease of 1.60 percentage points compared to last month.  The damaging monthly losses from the largest 4 holdings in my Top 10 resulted in the lighter group weighting.

As for the dividend weighting of my Top 10, it now stands at 26.32%.  This is an increase of 0.17 percentage points compared to last month.  Recent dividend raises from BLK and FAST more than offset the small dividend weighting decline I experienced from LOW replacing JPM in my Top 10.

 

Weightings

 

In general, for Sector Diversification, I target being within +/-3 percentage points of the sector weightings of the S&P 500.  For SuperSector Diversification, I target being within +/-5 percentage points.

The “Weight Diff.” column shows which sectors sit outside my preferred weighting ranges.  If I’m overweight a sector, it’s shaded green.  If I’m underweight a sector, it’s shaded red.  If I’m within my target weighting range, then no shading exists.

In January, there was no change with regard to having more or less sectors in my preferred weighting range.  I still have 3 overweight sectors and 3 underweight sectors in my Portfolio.  Industrials is still my most overweight sector and Information Technology is still my most underweight sector.

The sector in which I made the most progress towards reaching my preferred weighting range was in Consumer Discretionary.  I went from being 5.28% underweight to being 4.78% underweight… a gain of half a percentage point.  The out-performance of my three Consumer Discretionary holdings relative to the S&P 500 sector made all the difference.  Starbucks (SBUX) and Lowe’s Companies (LOW) each posted gains north of 13%, while Nike (NKE) gained almost 7% this month.

The sector in which I regressed most was in Information Technology.  I went from being 10.87% underweight to being 11.73% underweight… a loss of a whopping 0.86 percentage points.  My Information Technology stocks lost nearly two percentage points in weighting in January, compared to a reduction of nearly one percentage point for those in the S&P 500.  Seven of my ten Info Tech holdings were negative in January, with several of those stocks registering my worst losses of the month.  No wonder I lost ground here.

As for dividend weightings, I’m back to having 4 sectors exceeding 12%, as Industrials climbed above that threshold again.  My Healthcare stocks provide the most income of any sector, topping out at 15.67% of my total.  Real Estate continued to be my only sector with a dividend weighting below 4%, finishing at 3.93%.

My biggest change in dividend weighting was in the Financials sector (+0.18 percentage points).  This was due to the near double-digit dividend raise provided by BLK in January.

 

As always, I’ll keep all my sector weightings in mind as I continue to adjust my Portfolio, and my watchlist.

 

Watch List

Since my Portfolio dividends are now used for living expenses, and I no longer trade my time for money, I don’t expect to purchase stocks very often.  Yet, I could choose to sell a laggard stock and invest in a better one, thus, I plan to keep looking for opportunities and keeping my watchlist up-to-date.

 

Within my Portfolio, here are a few stocks that I’m watching for possible additions…

With software stocks Intuit (INTU) and Salesforce (CRM) getting crushed this past month, looking less expensive than normal, they’ve hit my radar.  INTU trades just below $500 while CRM trades around $212.  I’m still cautious with each right now, so if I do buy, it will most likely only be a share or two.  I’m not ruling out adding to another software name in Microsoft (MSFT).  This stock retreated in January as well, and would probably be the safer addition.  MSFT currently trades around $430.

It looked like Nike (NKE) had a nice price recovery to start out January, but the stock gave it all back and then some.  I’m still interested below the $60 level, but would prefer a level south of $56.

Automatic Data Processing (ADP) has dropped below my $250 target level again.  Now might be a good time for me to find a way to add a few shares.

 

Considering stocks I might sell…

Eastman Chemical (EMN) had a good month in gaining over 8%.  However, it’s still on my chopping block, as I could afford to reduce my Materials weighting and the stock is a slight loser for me over 6+ years.

FedEx (FDX) is a possible sell for me, too.  It had a good January as well, gaining over 2.6%.  So, a sale is looking even better if I wish to lock in some gains.  I’m thinking I could move the majority of any sales proceeds into ADP, keeping the money in the Industrials sector, then invest the remainder into some Info Tech software names as outlined above.

A couple of other disappointments that I might sell include Skyworks Solutions (SWKS) and T. Rowe Price Group (TROW).  I’m currently in the red with SWKS, but in the green with TROW.  However, neither has done much of anything in recent years, and their dividend growth has cratered compared to 3 years ago.

 

As for non-Portfolio stocks that I’m watching…

The stocks I mentioned last month, Zoetis (ZTS), Costco (COST), Cactus Inc. (WHD) and Waste Management (WM) have all moved up in price over the past month, dampening my excitement regarding initiating a position in any of them.  So, for now, I’ll just keep an eye on them from a distance.

 

Thoughts?

2026 is a year of transition for me, as I begin to use my dividends for current expenses, as opposed to reinvesting them.  If not already there, when do you foresee getting to the same point?  Has your journey taken you longer than expected?  Please share your thoughts!