What happened?

The S&P 500 kicked off 2026 by hitting a fresh record high of 6,986.33 on 12 January.  Meanwhile, US inflation appears relatively stable. The latest US Consumer Price Index (CPI) held steady at 2.7% for December 2025. In addition, 2026 is also a US midterm election year. Historically, midterm years tend to be the most volatile in the four-year presidential cycle, as policy uncertainty rises and markets reassess fiscal and regulatory direction. We’re already seeing early signs of this. Implied volatility (IV), which started the year near 13%, is climbing toward 20% for later in 2026. As a Singapore investor navigating global markets, this combination of record highs and rising volatility has made me think more carefully about risk management. Increasingly, I’ve noticed more investors moving beyond simply “buying the index.”  Instead, they’re exploring different instruments to tailor their exposure based on their market views, time horizon, and...