Staying invested pays off, even in 2026

2026 began with more turbulence on the markets than most investors are used to. However, the smartest decision may well be the same as it's always been: stay patient and don't sell everything in a blind panic.

When the stock markets plunge, many investors' first reflex is to limit the damage. That means selling, and buying again once the dust has settled. Yet even when prices have been rising for some time, nobody wants to be behind the curve and ignore the facts (and returns). As a result, we often try to time the market, which means getting out just before a fall, and getting back in just before prices rise.

The problem is that hardly anyone succeeds in timing the market over and over again. Neither the average investor nor the professionals – or even the latest AI tools – can predict when the peaks and troughs will come. Timing the market requires two correct decisions regarding buying and selling at the same time, and anyone who misjudges one of them may well pay the price.

What it costs to miss the best days

Anyone who sells and waits for the right time to get back in has to take an additional element into account. After all, the best trading days rarely come at quiet times. 76% of the best stock-market days coincide with a bear market (a decline of 20% from the most recent peak) or the first two months of a bull market (an increase of 20% from the most recent trough) (source). Those who exit the market out of fear routinely miss the recovery that follows (even since the start of the Iran war, several rallies have already taken place).

As an example, anyone investing in the S&P 500 through a tracker and who missed the best ten trading days of the last thirty years saw their returns halved. Those who missed the best thirty days lost as much as 84% of their total return (source). If you invested $10,000 in the S&P 500 in 2000 and stayed invested, you will have now seen that amount increase to over $44,000 (situation as at 30 March 2026). And that's despite the dotcom crash. And the financial crisis. And the Covid-19 pandemic. And the peak in inflation after Russia's invasion of Ukraine.

That doesn't just apply to the S&P 500 and the US stock market, either. Research over the past 200 years has shown that global equities yield an annual return of 4.9% (in USD, after inflation). A portfolio with 60% global equities and 40% bonds has historically yielded an annual return of 4.2% (source). It is important to bear in mind that past performance is no guarantee for the future. Investment icon Peter Lynch once said that far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves. Stock markets that fluctuate up and down are no exception; they are inherent to investing and are the 'price you pay' for long-term returns.

Diversification and discipline as a counterbalance

If you invest with at least a ten-year horizon, temporary shocks should be of little relevance. But anyone who doesn't want one crisis to undermine their entire portfolio should ensure sufficient diversification in their investments. That means holding different asset classes, in different regions and in different sectors. Not because diversification excludes (temporary) losses, but because it prevents you from becoming dependent on a single scenario. After all, the future rarely goes to plan. What is lagging behind today could yield a return tomorrow.

Staying invested doesn't mean that you never have to look at your portfolio, too. It's worth reviewing your investments from time to time on a regular, if not daily, basis. If you see certain positions have increased sharply, you may be able to sell some of them and reinvest the funds. Likewise, if you notice certain positions have nosedived, it may make sense to buy more. These are rational, planned decisions, rather than reactions to the day's headlines.

The power of compound returns

Timing the market and frequent buy and sell orders also cost money. Each transaction comes with fees and taxes, after all. And this is money that will no longer yield a return. Yet the biggest loss for active investors lies elsewhere, as it breaks the cycle of compound returns. A portfolio yielding an annual return of 5% will double after 14.2 years – but only if the capital continues to work for the entire period.

The message in 2026 is no different from that of any other turbulent year: market uncertainty is not a temporary phenomenon that you can bypass. It is a permanent state. Accepting that uncertainty is always going to be there, and aligning your strategy accordingly, can greatly increase your chances of success.

Ultimately, investing is less about making predictions and more about perseverance. One mistake investors sometimes make is to think that a sense of calm will return to the markets. But the markets are rarely at peace. There is always an election on the horizon, a new conflict, an economic slowdown or an unexpected shock. Waiting for the 'right moment' often means waiting for something that never comes.

Before investing, be sure to read up on the key features and risks of financial instruments.

Ever thought about actively managed investing?

If you're often swayed by such developments, it may be a good idea to have your portfolio managed instead of actively investing yourself. A team of investment specialists will construct a portfolio based on your investment horizon and risk appetite, without being influenced by the sentiment of the day. At Keytrade Bank, you can opt for asset management starting from €15,000.