Midweek Deep Dive: 🧨 My 2026 Reset Before Midnight Hits

🌞 Good Morning, Folks!

Everyone’s treating the year-end tape like it’s a victory lap. New highs, big winners, “soft landing” chatter, and a whole lot of confident voices telling you the playbook for 2026 is basically: do more of what worked in 2025.

That’s exactly what doesn’t add up.

Because when the crowd is this relaxed, the risk usually isn’t some dramatic crash headline. The risk is quieter: portfolios that look diversified but move like one trade, position sizes that “accidentally” got too big, and investors who don’t realize how much of their performance was a concentrated bet dressed up as skill.

Here’s the overlooked signal: the market mood has shifted from fear-of-loss to fear-of-missing-out, and that’s when people stop managing risk. They stop trimming. They stop checking their assumptions. They start believing volatility is something that happens to other people.

And the media will happily feed that illusion because “everything’s fine” is easier to sell than “your portfolio has a hidden weak spot.”

I’m not bearish. I’m not calling a top. I’m saying something simpler: when you’ve had a strong run, the highest ROI move isn’t finding the next hot stock. It’s making sure you don’t hand back what you already earned.

That’s what this midweek issue is about. Clearing the noise, stripping the portfolio down to what’s real, and rebuilding it with rules that don’t depend on good vibes.

In This Week’s Focus, I’m sharing the exact “1-hour reset” I do on the last day of the year: how I bucket my money, cap risk, trim oversized winners, and set a contribution plan that works even if 2026 starts messy.

Because if something feels off right now, you’re not crazy. You’re just noticing what most investors ignore in a good market: the danger isn’t that the trend breaks tomorrow. It’s that your process breaks first.

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🔍 This Week’s Focus: My “1-Hour Reset” For 2026 (So I Don’t Give Back 2025 Gains)

It’s the last day of 2025, and I’m going to say something that might annoy you.

If you had a great year… you’re in danger.

Not because you’re dumb. Because the market has a sneaky way of punishing the exact emotion a good year creates: comfort.

Comfort makes you sloppy.
Sloppy makes you oversized.
Oversized makes you panic when the first real drawdown shows up.

I’ve been there. I’ve watched a strong year turn into a stupid January because I let one winner become my identity, and I convinced myself “it’ll come back” like the market owed me a refund.

So tonight, before the calendar flips, I’m doing a reset. Not a “new year, new me” vibe. An actual investing reset. One hour. No predictions. No fancy dashboards. Just rules that keep my portfolio from humiliating me in 2026.

Because here’s the ugly truth most people learn too late:

A 25% drop needs a 33% gain just to get back to even.
A 50% drop needs a 100% gain.

So the goal isn’t to be right all the time.

The goal is to not do anything irreversible.

Let’s get to work.

⚡ Do This First (3 Minutes): The “Top 3 Reality Check”

Open your brokerage right now.

Sort your portfolio by position size.

Look at your top 3 holdings and ask one question:

If these drop 25% next month, do I still sleep?

If the answer is “no”… you already know what you need to do.
You’re not diversified. You’re just lucky in multiple positions.

And luck is a terrible plan for 2026.

🧱 Step 1: Bucket Your Money Or You’ll Overthink Every Headline

Most investors don’t have a portfolio. They have a random pile of tickers and feelings.

The fix is simple: three buckets.

Bucket A: The Seatbelt (Core / Sleep-Well Money)

This bucket exists for one reason: to keep you alive when markets get stupid.

Broad exposure. Boring. Repeatable.

Target: 50% to 80%
Rule: You add to this even when you feel “late.”

If you’re only buying this when you feel safe… you’re doing it backwards.

Bucket B: The Engine (Compounders)

These are businesses that can compound without perfect conditions. Real cash flow. Strong balance sheets. Pricing power. Stuff you can hold through pain.

Target: 15% to 40%
Rule: If you can’t hold it through a 20% drawdown without rage-selling, it doesn’t belong here.

Bucket C: The Nitro (Conviction Bets)

AI, semis, emerging themes, turnaround stories… the fun stuff.

Target: 0% to 20%
Rule: This bucket is allowed to be wrong. But it’s not allowed to wreck you.

Here’s the line I keep repeating to myself:

Stop pretending 7 tech stocks is diversification.

If everything you own wins or loses on the same news cycle, you don’t have a portfolio. You have a single trade disguised as adulthood.

✂️ Step 2: Set Hard Risk Limits (Because Hope Is Not Risk Management)

This is where most people lose 2026 before it even starts.

They let a winner run. It becomes 18%, 22%, 30% of their portfolio.
They tell themselves it’s “conviction.”

No. It’s concentration. And concentration is a beautiful thing… until it isn’t.

These are my non-negotiable risk limits:

• Max single stock position: 7%
  (10% only if it’s a true “forever” compounder and I can explain it in one clean sentence)

• Max theme exposure (all positions combined): 20%
  (If one theme can ruin your year, it’s too big)

• If a position doubles: I trim enough to bring it back under my max rule
  (Yes, even if I love it. Especially if I love it.)

• If a stock drops 25% and the thesis is broken: I cut
  (Not when it feels good. When it’s true.)

Truth knife of the year:

Most investors don’t lose because they picked the wrong stock.
They lose because one stock became their personality.

🧾 Step 3: The One-Page Reality Check (This Is How I Kill Dead Weight)

For every holding, I answer these five questions. Fast. Honest. No excuses.

1) Why do I own this?

One sentence. No paragraphs. No jargon.

If you can’t say it clearly, you don’t own it. You’re just attached to it.

2) What would make me sell?

If your sell rule is “when it goes back up,” you’re not investing.
You’re negotiating with your ego.

3) Is this a business or a story?

Businesses produce cash.
Stories produce dopamine.

Guess which ones collapse harder when sentiment shifts.

4) If it drops 30%, would I buy more?

If not, why are you holding it now?

This question hurts because it reveals the truth:
a lot of positions are held out of fear of regret, not conviction.

5) Which bucket does it belong in?

Conviction bets aren’t allowed to quietly become core holdings just because they ran.

And here’s the rule that changes everything:

If I can’t answer these cleanly, I reduce the position.

Not because it’s “bad.”
Because clarity is an edge. And confusion is a tax.

💰 Step 4: The 2026 Contribution Rule (Where Wealth Actually Gets Built)

People love “market calls.”
The real money gets made in boring consistency.

This is my 2026 autopilot plan:

The 60/30/10 Rule

Every time I add money:

• 60% to Bucket A (Seatbelt/Core)

• 30% to Bucket B (Engine/Compounders)

• 10% to Bucket C (Nitro/Conviction)

No drama. No overthinking. Just execution.

Then one adjustment that saves you when markets turn:

The Drawdown Flip

If the market drops meaningfully and fear is back in the room, I temporarily go:

• 70/25/5

Why? Because downturns are where the Seatbelt pays you back.
That’s when the “boring” buys become the smartest decision you made all year.

If you don’t have a plan like this, here’s what usually happens:

You get aggressive at the top.
You hesitate at the bottom.
And you spend the year buying high and “waiting” low.

🧲 Step 5: Build A Watchlist That Forces Discipline (Not Fantasy)

Most watchlists are just wishful thinking.

A real watchlist has triggers.

Pick 10 names you’d genuinely want to own (or add to). For each one, write:

• My buy price (or valuation range)

• What needs to be true (catalyst checklist)

• What would prove me wrong (thesis breaker)

Because if you don’t write your buy prices down now, you will chase later. Guaranteed.

This is how you turn “I wish I bought that” into “I had a plan, and I executed.”

🎯 Step 6: Pick ONE Theme For 2026 (Not Five)

You don’t need to be everywhere. You need to be right somewhere.

Pick one area to study deeply in Q1. One trend where you can build real insight and spot second-order winners.

Here’s my filter:

• It’s multi-year, not one-quarter hype

• Winners can generate real cash, not just promise it

• You can name beneficiaries beyond the obvious market darling

The goal isn’t to sound smart.

The goal is to reduce mistakes.

✅ Step 7: The “Do This Tonight” Checklist (30 Minutes, No Excuses)

If you want the cleanest reset before 2026, do this in order:

1. Write your bucket targets (Seatbelt / Engine / Nitro)

2. Sort portfolio by position size and identify your “danger positions”

3. Trim anything above your max position rule

4. Cut or reduce anything you can’t explain in one sentence

5. Set your contribution autopilot (60/30/10 + drawdown flip)

6. Create a 10-name watchlist with buy triggers

7. Pick one theme to study in Q1

That’s it.

Not sexy.
Not viral.
But if you do this, you’ll be ahead of most investors by tomorrow morning.

🥊 My Final Thought Before 2026

I’m not trying to be the smartest investor next year.

I’m trying to be the investor who doesn’t hand back gains because I got emotional, oversized, and arrogant.

Because the market doesn’t care how good you felt in December.

It cares what you do when your best position is down 18% in February and every headline screams that the party is over.

So if you want 2026 to be the year you stop guessing and start operating like a real investor… you’ll want to stay on this list.

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🧠 Final Word

It’s funny how the calendar flips and suddenly everyone pretends the market owes them a clean slate. You’ll hear a lot of loud takes in early January, a lot of “new leaders,” “new regime,” “new winners,” like 2026 is going to announce itself with a neat little label. But the truth is the market usually starts the year the same way it ends it: messy, emotional, and full of people confusing recent performance with permanent reality. That’s when portfolios get damaged, not by bad stocks, but by rushed decisions.

I’m going into 2026 with the same advantage I want every year: rules that don’t care how I feel. When you have a process, you don’t need to predict the next headline, you just need to execute the next good decision. I’d rather miss the first 5% of a move than be fully exposed when the first 15% drawdown shows up. The goal isn’t to be early, it’s to be right and still standing when the crowd runs out of certainty. That’s the kind of patience that looks boring in the moment, and feels genius later.