Investing in turbulent times: Stock market wisdom for 2026

At the turn of the year, we tend to look for guidance. But on the stock market, the old adage proves true every year: “Predictions are difficult, especially when they concern the future.” This quote is often attributed to physicist Niels Bohr, comedian Karl Valentin, but also Winston Churchill and Mark Twain. However, it probably originates from Danish.

The underlying problem is fundamental: investing based on historical data is often like trying to steer a car safely forward by looking exclusively in the rearview mirror. We can see clearly where we have come from (the charts of the past), but the curve that lies directly ahead remains hidden.

For the year 2026, we would therefore like to invite you to view the most common stock market wisdom not as rigid dogma, but as what it really is: wonderful paradoxes. Because for every piece of advice, there is a counter-proposal. Let's take a brief excursion through this treasure trove of contradictory wisdom – accompanied by the great minds of financial history.

“Obviously, you don't have to be able to predict the stock market to really make money with stocks.”

Many investors rack their brains over the perfect entry point. But the legendary fund manager Peter Lynch (*1944) reassured us with the above insight: it is the liberation from the compulsion to know the future. Those who try to time the market often fail because of their own psyche or the unpredictability of the masses. Even one of the greatest physicists, Isaac Newton (1643–1727), learned this the hard way when he lost a fortune in the South Sea Bubble. His resigned conclusion: “I can calculate the trajectory of celestial bodies to the nearest centimeter and second, but not where the crazy crowd can drive a stock price.”

The charming contradiction (and the solution): If we don't know when the market will turn, how should we act? Amschel Meyer Rothschild gave perhaps the most honest answer of all time: “In my stock market speculations, I have never been one of those fools who repeatedly make the impossible attempt to buy only at the lowest price and sell only at the highest.”

Say goodbye to the illusion of perfect timing. The “right” price is the one you pay to participate in long-term value creation.

"The Wall of Worry"

Especially in times of geopolitical uncertainty, we often hesitate to invest. It feels wrong to be optimistic when the world is in chaos. But this is where one of the oldest Wall Street metaphors comes into play: “Stock prices climb a wall of worry.”

Markets often rise not because of good news, but despite bad news – simply because expectations were even gloomier than reality. Sir John Templeton (1912–2008) masterfully summed up this cycle: “Bull markets are born in pessimism, grow in skepticism, mature in optimism, and die in euphoria.”

So as long as we are still worried (skeptical), the market is often healthier than we think. To benefit from this rise, you have to be able to endure pain. André Kostolany (1909–1999) summed it up: “Stock market profits are compensation for pain. First comes the pain, then the money.” And for those who want to avoid this pain (volatility), Kostolany's famous advice is: “Buy stocks, take sleeping pills, and don't look at the papers anymore.” Of course, this only applies to a broadly diversified portfolio; with a focus on a few individual stocks, this exercise might not be successful.

“He who dares nothing, hopes for nothing.”

Friedrich Schiller, who is not known as an investor, already knew in his Wallenstein that there is no return without risk. In a world where money can be printed, real assets remain the anchor. Stocks are nothing more than productive capital – shares in real factories, patents, and earnings.

The real risk is entering the capital market, investing in tangible assets, knowing full well that you are taking a risk.

Not every investor wants to feel the full force of the stock markets. If you want to sleep well, you can and should diversify: bonds or gold as a buffer. Here, it is worth taking a look at ancient times. An old Jewish proverb (from the Talmud) recommends a division known as the “rule of three”: “A person should always divide their money into three parts: one third in land, one third in merchandise, and one third kept liquid in hand.”

Translated into the year 2026, this means:

• 1/3 real estate (land)

• 1/3 stocks (commodities/company shares)

• 1/3 gold/bonds (as a liquid reserve and safe haven)

This rule of thirds comes up again and again. Since financial markets have evolved since ancient times, perhaps we shouldn't take the division into thirds too literally. However, it shows that the basic idea of diversification goes back a long way.

The conclusion for 2026

Investing remains an art that requires humility. We don't know exactly what 2026 will bring. But we do know what works in the long term: quality, patience, and diversification.

There is a valid argument against pure, blind “index investing,” which says that if you only buy the index, you also buy the “trash” that is included in it. A selective choice of quality companies (stock picking) is therefore entirely justified. Once again, Sir John Templeton provides us with the best summary: “The only investor who should not diversify is the one who is always 100% right.” Since we are all fallible, diversification is not an admission of weakness, but a sign of intelligence.

This is a marketing communication from Kathrein Privatbank Aktiengesellschaft within the meaning of the Securities Supervision Act 2018 and is for informational purposes only. This information is intended to provide a general overview of current market data and Kathrein's market opinion and does not contain any direct or indirect recommendation for a specific investment strategy in the sense of a financial analysis. When investing in securities, price fluctuations due to market changes are possible at any time. Information and representations relating to the past do not allow reliable conclusions to be drawn about future results. Despite careful research and compilation, no liability or guarantee can be assumed for the accuracy of the data.