Markets & Economy
Why “Don’t Freak Out” Might Be the Best Financial Advice for 2026
What Market History Says About Periods Like This
“Don’t freak out.”
James Altucher recently said this in a note to readers, referencing “the story” of 2025 – a year that made it very clear markets don’t need a crisis to feel uncertain.
The S&P 500 closed around 6,950 in December and logged 38 record highs across 12 months. On paper, it was a strong year.
Yet volatility stayed elevated even as indexes climbed. The VIX – Wall Street’s “fear index” – stayed jumpy, signaling investor confidence lagged behind price action.
Altucher has a blunt way of describing moments like this. Periods of volatility, he argues, often arrive before major breakthroughs, not after them.
And as we move into the new year, Altucher’s been clear about how he views the setup:
A massive bull market’s about to begin.
“Volatility and innovation tend to arrive together,” Altucher writes. “Moments that feel chaotic on the surface often hide the biggest opportunities.”
Looking back at the 1987 crash, the dot-com bust, the financial crisis in 2009, and the pandemic, he sees a familiar pattern…
“The hardest stretches emotionally often come before major breakthroughs.”
History tends to agree, of course…
In times of high volatility, most investors tend to sell out of their stocks.
That’s not a good thing, according to the data. And it causes those “traders” to historically underperform the market…
Research from DALBAR Inc.’s Quantitative Analysis of Investor Behavior (QAIB) – an annual independent study that measures how investors’ actual decisions affect investment results over time – consistently shows a gap between investment performance and what investors actually realize.
The QAIB calculates realized investor returns by tracking net fund flows (including purchases, sales, and timing of transactions) and comparing that performance with broad market benchmarks such as the S&P 500 Index. Over multiple periods (e.g., 10-, 20- and 30-year spans), these analyses have documented that investors typically capture less return than the underlying benchmarks, largely because they tend to buy after price rises and sell during downturns – behaviors that detract from overall performance.
The difference, known as the “Behavior Gap,” can be explained in large part by emotional decision-making.
Case in point…
In 2024, the average equity investor (any person who invests in the stock market) earned about 16.54%, while the S&P 500 returned roughly 25%. Why? Instead of holding, they sold during the volatility and tried to time and trade the market.
That’s why Altucher’s saying… “don’t freak out.” And recommends you stay in the market – perhaps even buy more – during times of high volatility.
Knowing that in theory is one thing. Living through it is another.
Let me see if I can help…
I want to show you something Chuck Carlson, CEO and portfolio manager at Horizon Investment Services, sent me:
What Followed Periods of Peak Market Stress
| Event | Market Condition |
Dow Performance 12 Months Later |
| 1987 Crash (Black Monday) | One-day -22% drop | +23% |
| Dot-Com Bust (2002 trough) | Multi-year drawdown | +32% |
| Financial Crisis (Mar 2009) | Systemic panic | +61% |
| Pandemic (Mar 2020) | Global shutdown | +74% |
Chuck’s spent more than 40 years watching how investors respond during moments like these – and what tends to happen next.
“Volatility is not necessarily a bad thing,” Carlson says. Much like Altucher, he believes it can be a source of opportunity – if it’s managed correctly.
Rather than anchoring to a single sector or headline, he points to three forces that tend to drive sustained market moves over time – inflation, interest rates, and corporate profits – and notes that, taken together, they currently lean more constructive than destructive.
That doesn’t remove risk. But it does suggest the environment may be more resilient than it feels in the moment.
P.S. James’s advice – “don’t freak out” – aligns closely with what Chuck Carlson has seen over decades of managing portfolios. Emotional discipline, more than prediction, often proves to be the deciding factor when markets feel most uncertain.
For readers who want to explore how that kind of discipline shows up in a real portfolio, WorthNet offers a simple way to connect with an independent adviser, including Chuck, right here.
Simply fill out our quick, confidential questionnaire by clicking the button below. It takes less than a minute. And you’ll be matched with an adviser aligned to your goals from our invitation-only network for a free consultation.
Charles B. Carlson, CFA®
CEO & Portfolio Manager of Horizon Investment Services
Investment Visionary, Seasoned Asset Allocator
Charles B. Carlson is a veteran investment adviser with over 25 years of experience in retirement planning, asset allocation, and portfolio management. He is CEO of Horizon Investment Services (CRD #110642), a proud member of the WorthNet partner adviser network.
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Last Revised: February 4, 2026
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