Unlocking Hidden Gems: A Smart Way to Grow Your Money in 2026

The stock market is expected to do well in 2026, with a predicted 12% rise for the S&P 500. This is not just a random guess; it's backed by data.

Economic Growth Indicators

• GDP Growth: The Atlanta Fed's GDPNow indicator suggests a strong 5% GDP growth in the last quarter of 2025, much higher than most economists predict.
• Drivers of Growth: This growth is driven by big companies investing in the future, including AI. This spending boosts other firms and workers, who then spend more, creating a positive cycle.

Labor Market Stability

The labor market, often seen as the economy's weak spot, is showing signs of improvement.

• Unemployment: Unemployment, which peaked at the end of 2025, seems to be decreasing.
• Employment Data: Both private and public employment data show no alarming trends, indicating a stable job market. This stability is crucial for the economy in 2026.

Investment Opportunities

In this thriving market, there are still bargains to be found, especially in closed-end funds (CEFs). These funds often trade at discounts to their net asset value (NAV), offering a great opportunity for investors.

Central Securities Corporation (CET)

• Discount: Trades at a 17% discount to its NAV.
• Focus: Focuses on high-quality companies like Alphabet, Progressive Corp, and Amazon.
• Dividend: Offers a 5.3% dividend that grows with the fund's portfolio returns, making it an attractive option for investors looking for income and growth.

Performance and Future Prospects

• Performance: CET has performed well over the last three years, benefiting from the market's shift towards future growth and productivity gains from AI.
• Discount Trend: Its discount to NAV has been generous, although it has been decreasing since hitting over 20% about two years ago.
• 2026 Outlook: This sets up CET to rise with the market in 2026, benefiting from its discount and dividend growth.

Key Economic Indicators

Investors should keep an eye on earnings and sales, which are key indicators of economic health.

• Sales Growth: Sales rose 7.8% across S&P 500 companies in the fourth quarter, a positive sign for the economy.
• Market Outlook: While unpredictable shocks can always occur, the current data points to a strong market year in 2026, making CET a sweet setup for those seeking income and growth.