Macro forces are large-scale economic, political, social, and environmental factors that broadly affect entire economies. They shape the broad environment in which businesses and society operate. When it comes to value investing, they can affect the kind of strategies we use.
But value investing isn’t about chasing the latest trends or trying to outguess the market. Instead, I like to keep things simple. My number one rule is: don’t lose money. This investment philosophy comes from the wisdom of Warren Buffett, Benjamin Graham, and other notable value investors. It guides every decision I make.
Today, I'll break down some of the biggest forces affecting value investing and shaping the market entering 2026. I'll also answer an important question every value investor should be asking: "How do I strategize around them?"
Interest Rates and Their Impact on the Market
People in the market talk a lot about interest rates. Every time the Federal Reserve hints at a change, you can see big swings in stock prices and a lot of headlines predicting what will happen next. There is no doubt that interest rates affect the market.
Higher rates can make borrowing more expensive for companies, and that can slow down growth or squeeze profits. When rates drop, you often see market participants get excited and prices go up.
But here’s what I’ve learned over the years. Trying to predict what the Feds will do, or how the market will react to the actions of central banks, is a losing game. Even if you had inside information about the next move, it would not guarantee investing success. Warren Buffett has said that he never makes a buy or sell decision based on macro forecasts, even if he knew exactly what the Secretary of the Treasury or the Fed was planning. I follow the same approach to buying stocks.
At Rule #1 Investing, I do not base my decisions on interest rate speculation or economic forecasts. Instead, I stay focused on the business itself. I want to know if the company has a strong moat, good management, and real value. If the stock is on sale because of a temporary event or market fear, that is when I get interested. The headlines about rates are just noise.
It is easy to get distracted by big economic news. Many investors let fear or excitement about interest rates push them into quick decisions. I choose to tune out the noise and stick to my process. My job is to find wonderful businesses at a discount and hold them for the long term. That is how I protect my capital and build wealth, no matter what is happening with interest rates.
Inflation and Value Investing
Just like interest rates, inflation is another factor that often dominates headlines and stirs up concern among value investors. Consider that as we enter 2026,inflation has increased prices by just over 25%.
When prices go up across the board, it can feel like money loses value right in your pocket. People worry about what inflation will do to their savings and investments. It is a real concern. Rising costs can eat into profits and reduce the purchasing power of every dollar.
I have seen investors panic when inflation starts to rise. They might rush to buy or sell based on headlines or predictions. But that kind of reaction rarely leads to good results. Instead of guessing what inflation will do next, I focus on owning businesses that can handle it.
The key to good value investing is finding companies with strong pricing power and economic moats. These are businesses that can raise their prices when costs go up and still keep their customers. A company with a wide moat and loyal customers is much more likely to survive and thrive in an inflationary environment. That is what I look for.
Inflation is a fact of life, but it does not have to derail your value investing plan. By sticking with quality businesses that can adjust to rising costs, I can protect my capital and keep growing my wealth over time. The Rule #1 approach is to look past the headlines and focus on what really matters: the strength and value of the business.
Consumer Spending and Its Impact on the Economy
Another thing investors may have to watch is consumer spending. It is a huge driver of the economy. When people are confident and willing to spend, businesses see more sales. Profits usually go up. This creates jobs and keeps the economic engine running.
On the other hand, when consumers pull back and start saving more, companies can struggle. The economy may slow down.
I pay attention to trends in consumer spending, but I do not let short-term changes dictate my decisions. What matters most to me is how the businesses I own respond to changes in demand. The best companies can adapt, stay profitable, and even grow when times are tough. They offer products or services that people need or want, no matter what is happening in the economy.
If a company can keep customers coming back, even when consumer spending dips, that is a sign of real strength. I look for businesses with loyal customers and a strong brand. These companies are better positioned to weather slowdowns and come out even stronger when spending picks up again.
At the end of the day, the Rule #1 approach is about understanding the true value of a business and how it fits into the bigger picture. This is the core of Rule #1: finding public companies that maintain their worth. By focusing on quality companies, I can invest with confidence, no matter what is happening with consumer spending or the economy as a whole.
How the Evolution of Globalization Impacts Value Investing
The bigger picture is always changing.
One of the biggest shifts right now is the move away from globalization. Countries are starting to look inward, build local supply chains, and protect their own industries. Consider how US-China relations affect the economy, as do several other geopolitical conflicts.
Trade tensions, new tariffs, and political conflicts are making it harder for companies to do business across borders. This shift has big implications for value investing.
I have seen how global events can cause sudden changes in the market. When countries disagree or trade slows down, some companies get hit hard. Costs can go up, supply chains can get disrupted, and growth can slow. These are real risks that investors need to understand.
But even in a world where globalization is slowing, there are still opportunities. I look for businesses that are flexible and can adapt to new realities. Companies with strong local operations, dependable supply chains, and a loyal customer base are better prepared for uncertainty. It is important to know where a business gets its revenue and how much it relies on global trade.
I do not try to predict every geopolitical event, but I do factor in how these changes might affect the companies I own. The Rule #1 approach is to focus on businesses with strong fundamentals and the ability to thrive in different environments. By sticking to this process, I can protect my capital and find value, even when the world is changing fast.
Will Artificial Intelligence Change Your Value Investing Strategies?
And now for one of the biggest macroeconomic shifts: AI. Artificial intelligence is changing the way people think about investing. Every day, there are new tools and platforms that promise to makestock picking faster and easier.
Some investors use AI to calculate price-to-earnings, spot trends, or even make trades automatically. It is impressive technology, and there is no question that it is shaking up the industry. I pay attention to these advances, but I do not let AI replace my own research or judgment. Computers can observe market prices and calculate revenue growth at lightning speed.
AI can be a helpful tool for screening value stocks or gathering information. It may even help spot undervalued stocks. But it cannot make the final decision for me.
The Value of Artificial Intelligence to Value Investors
Is an AI-powered company a good value investment? Between two companies, will the one using AI have a better price-to-book ratio? Maybe:AI use in the workplace has doubled from 2023 to 2025. But we still have to question the kind of value it provides to our investments.
For me, value investing is still about doing the work. I want to read the reports and see the financial statements. We're looking for fundamentally good businesses with high intrinsic value. That means understanding the moat and getting a sense of the people running the business.
Unless you're deep in the AI sphere or already own tech stocks, it's much better to favor industries that have stood the test of time. Stay focused on businesses with strong cash flow, real moats, and a simple product we can buy at a significant discount. A company's fundamentals are what an intelligent investor looks at.
This can be of great importance for value or growth investors with a lower risk tolerance, especially if AI turns out to be a bubble.
At the end of the day, the Rule #1 approach is about being an informed and disciplined value investor. Use the best tools available, but never forget that sound judgment and patience are what really build wealth. Technology can help, but it is no substitute for a fundamental analysis of the stock market. Nor will it replace in-depth knowledge of your values and investment strategies.
Stay Focused, Value Investor: The Rule #1 Advantage
There is a lot of noise and hype in investing today. I focus on the big picture view and stick to proven value investing principles. The real edge comes from sticking to the basics. Remember:value investing involves buying stocks trading for less than their book value.
Protect your capital. Understand the true value of the businesses you own. If you keep a diversified portfolio, make sure you understand each of the companies in it. Tune out the headlines. Do a security analysis of your assets and trust your research.
No matter what the market throws at you, the Rule #1 approach keeps you steady. Patience, discipline, and a clear process will get you further than any shortcut.
Remember, building wealth is a long game. Keep learning. Stay focused. Never lose sight of the most important rule: don’t lose money. That’s how you win, no matter what the market does.
Attend a Rule #1 Workshop
Ready to apply these principles? Join a Rule #1 Investing Workshop and learn how to research, choose, and buy great companies at the right price. Take your investing skills to the next level. The best value investing strategies come from understanding the basics.
