Picture supply: Getty Photographs
There isn’t any scarcity of doom and gloom across the prospects of the British financial system. However you wouldn’t know that from trying on the efficiency of UK shares.
Final yr, for instance, the FTSE 100 index of main UK shares moved up by round a fifth.
For a group of principally long-established corporations in mature industries, that may be a pretty thrilling efficiency for my part.
So, may 2026 be one other classic yr?
The financial system and the market are usually not the identical
Heading into the yr, there are a variety of ongoing causes for concern.
The UK financial system seems weak, international geopolitical dangers stay elevated and there are indicators of slowing shopper spending in lots of markets.
Then once more, the identical was true at this stage final yr – and the FTSE 100 nonetheless did nicely. A weak financial system doesn’t essentially result in a weak inventory market, particularly within the short-to-medium time period.
On high of that, there are some potential grounds for optimism in regards to the coming 12 months.
For instance, momentum has been constructing over the previous yr in direction of ending the Russian conflict in Ukraine. Some rising markets are rising handily. The tariff volatility of final yr may hopefully turn into a distant reminiscence.
From a optimistic angle, then, it might be that 2026 does certainly grow to be an incredible yr for UK shares.
Right here’s my investing plan for 2026!
In actuality, we simply have no idea.
Nonetheless, that doesn’t change how I plan to spend money on the inventory market this yr.
Yearly, regardless of how nicely the broader inventory market does, some particular person corporations fare nicely whereas others fare badly even when the financial system is driving excessive.
There’s a distinction between the efficiency of a inventory market index and the way every particular person share inside it performs. That was true final yr – and it will likely be true in 2026 as nicely.
That explains why, slightly than shopping for an index (for instance, by investing in an index tracker), I purpose to carry a well-rounded, diversified portfolio of what I see as high-quality shares purchased at engaging costs. Some well-known UK shares type a part of that portfolio.
This yr, I count on to maintain doing the identical factor.
Down, however is it out?
One of many UK shares I purchased final yr utilizing that strategy is FTSE 100 brewer and distiller Diageo (LSE: DGE).
As a believer within the potential monetary advantages of taking a long-term strategy to investing, I plan to maintain holding Diageo throughout 2026 and past.
It had an terrible 2025. Now it has modified administration, however that doesn’t essentially imply it will likely be capable of conquer the challenges going through it (and plenty of of its rivals).
These embrace weak shopper spending on luxurious spirits in the present day – and weakening alcohol consumption tendencies over the long term. Each assist clarify why Diageo shares fell in 2025.
However with its decades-long document of annual dividend per share development, the 5%-yielding UK share is engaging from an earnings perspective – if the dividend lasts.
And with its sturdy model portfolio, international distribution muscle, massively worthwhile enterprise mannequin and distinctive, iconic manufacturing websites, I stay optimistic in regards to the outlook for the British drinks large.
