Where to Invest in 2026: Global Market Ranking and Outlook — October 2025 — Based on the PPP–IRR–SRP Predictive Valuation Model

This study applies the PPP–IRR–SRP predictive valuation model to compare and rank major stock markets as of October 10, 2025, identifying the regions most likely to outperform in 2026. While traditional P/E ratios show wide dispersion (10.1–33.2) and limited comparability, the Potential Payback Period (PPP) integrates growth and discount rates into a time-based metric, and the derived Internal Rate of Return (IRR) yields a narrow, globally consistent range (4.77–8.51%). The Stock Risk Premium (SRP = IRR − r), capped at a 5% discount rate, provides a standardized measure of excess equity yield across countries. Empirical testing over February–October 2025 confirms SRP’s predictive power: Return = 3.72 × SRP – 1.41 with a correlation of r = 0.67, showing that higher SRP values forecast stronger market performance. High-SRP markets (South Korea, Japan, Brazil) outperformed, while low-SRP markets (France, India, U.S.) lagged. As of October 2025, the model points to a rotation toward Asia and select European markets—notably China, Taiwan, and France—as the most attractive opportunities for 2026, confirming the PPP–IRR–SRP framework as a robust, yield-based guide to global equity allocation.