What should investors worry about in 2026?

By Joss Murphy on 9 January 2026 in Basics

What should investors be worried about as 2026 gets underway? Are global conflicts the biggest concern? How about stock-market volatility? It’s very difficult to know what’s really important because we face a daily barrage of stories, opinions, projections, claims and warnings. It all comes down to what you can – and can’t – control. Here is our guide to where your focus needs to be and what you can ignore.

What does matter

Inflation

This affects the cost of everything. When inflation is soaring, prices of everything from a loaf of bread to a new car are higher. The current inflation rate is published monthly by the Office for National Statistics, which examines demand over the previous 12 months. The Bank of England uses interest rates to control inflation. They’re set quarterly by the Monetary Policy Committee, based on data and forecasts. For savers and investors, interest rates and returns must at least keep pace with inflation; otherwise, their money loses value.

Your investment goals

Know what you’re trying to achieve. For example, are you looking to build a retirement pot or need an extra revenue stream? This will influence your investments. If you’re seeking bumper, double-digit returns, you may need to allocate more to emerging markets with greater growth potential. You must also be clear about your attitude to risk. Are you happy riding the wave of stock-market volatility, or do you prefer more stable investments that enable you to sleep soundly? For example, if you’re approaching retirement, then you’ll probably prefer to have the bulk of your assets in bonds, rather than high-octane, volatile holdings.

Fund costs

These are often overlooked but can significantly impact returns. Every investment fund will cost you money, but the fees charged can vary. The main one to look for is the ongoing charges figure. This is the annual cost of operating the fund and includes the management fee, as well as administrative and legal costs.

Diversifying your portfolio

This is very important. Pinning your hopes on a few investments is dangerous. If they do well, you’ll benefit; if they underperform, you’ll be facing losses. A diversified portfolio typically includes a mix of equities, bonds, property, cash, and alternative investments. The hope is that not all investment types will fall at the same time. When one goes through a difficult patch, another should ideally increase to compensate. Such an approach is sensible for most investors – and particularly beginners who are still learning about asset classes and how they work.

Choosing the right manager

The fund manager will help determine whether you make money, so it’s vital to select them with care. Choose correctly, and you can enjoy decent returns. Pick badly, and you could make a loss. FundCalibre’s experts narrow thousands of funds to a preferred list of around 200 they believe are worth investors’ consideration.

Managers we like include James Thomson, lead manager of the Rathbone Global Opportunities fund, who has become one of the top performers in the IA Global sector. Another is Richard Hallett, lead manager of the IFSL Marlborough Multi-Cap Growth fund. He has a strong record in stock picking.

What doesn’t matter

Short-term volatility

Stock markets rise and fall constantly. If you worry about every daily price movement, then you’ll cause yourself no end of stress. Such volatility is usually just noise, rather than anything dramatic. News headlines, rumours and analyst speculation can cause the market to overreact. Sometimes it can be hard to pinpoint what’s caused the market to move. That’s why it’s often best to sit tight and see whether it’s a prolonged downturn. As long as you’re happy with your long-term investment objectives, then short-term volatility shouldn’t give you too many headaches.

Fad funds and sectors

There will always be a buzz around certain companies, stocks and sectors. Whether it’s the latest technology, a popular trend, or the latest obsession. Many of these areas can soar in value virtually overnight. However, they’re often volatile, and some will disappear without a trace. The most famous was the dot-com bubble in the late 1990s, when companies with no real revenue were given inflated valuations. Prices rocketed, then collapsed. The fact is, there will always be a hot stock or sector. Don’t waste your time trying to jump on the bandwagon of something causing a stir on social media.

Market timing

Even professional investors with years of experience find it exceptionally difficult – if not totally impossible – to time the market accurately. There are too many variables. Stock prices can be affected by everything from company results to economic forecasts, geopolitical unrest and sector-specific issues. A better approach is to embrace pound cost averaging. This is a financial technique that helps people smooth returns by investing regularly. They commit a set amount each month to buy fund units at their current price. Should they fall in value, therefore, you’ll get more units for your money.

Temporary losses

No one likes to see the value of their holdings fall, but it’s important to remember that these are only paper losses. They only become real losses if you sell at the wrong time. While it can be tempting to panic sell when prices fall, this can end up causing more problems if the dip is temporary. To re-buy the stock, you may have to pay a premium. The key is whether you believe in the individual investment. If it’s been chosen after detailed analysis of its prospects, then you should be happy to keep it through the highs and lows. Of course, that’s not to say you must hold it forever. It’s important to revisit your portfolio at least once a year to ensure it’s on target to meet your objectives.

Shock headlines

There are thousands of news sources, all searching for stories and angles. Some will be accurate; others will be completely wrong. Their accuracy will depend on the veracity of sources used and whether the publisher is a respected, established title or a clickbait social media outlet. Speculative stories may have been placed by people who have an interest in the stock price rising. In such cases, the subsequent hikes are likely to be temporary. Similarly, worrying reports or predictions may adversely affect the valuations of companies in the same sector. However, if these prove to be unfounded, then they will recover.