Fools Stay Optimistic in the Face of Fear

Last Thursday, the Nasdaq-100 fell 6.36%. It was the index's worst day since March 2020. Two trading days later, on Monday, it jumped 3.40%, its best day since March.

Anyone who sold in a panic on Thursday missed Monday's rebound. The index closed yesterday about 11% below its Oct. 6 record, though futures were up more than 1% this morning. Even after the sell-off, it's still up nearly 10% for 2026. Nobody knows if the rest of the recovery will take weeks or years.

That's where the fifth of six Rule Breakers Principles comes in: You Get to Invest for the Whole Race!

Investing never locks you in. You can keep adding money at every stage. You can buy more of the businesses that are pulling ahead, and back new ones as you find them. Setbacks come with the territory. Historically, the market has fallen in about one year out of three, and it has still climbed over time.

Why Stocks Build Wealth

Foolish investors are optimists for a reason. When you buy a share, you own a slice of a company's future profits. Great companies keep finding ways to grow those profits. That's a big part of why stocks have historically beaten bonds, cash, and gold over long stretches. For everyday investors, few places have built more wealth.

Look at a long-term market chart and it climbs from the lower left to the upper right. From far enough away, even 2008 looks like a small dip. David Gardner, The Motley Fool's co-founder, sums up the outlook with his personal motto: excelsior. It's Latin for "ever higher."

You'll hear the word "correction" a lot this week. David has pushed back on it since at least 1998. Why, he asks, do we only call the market "correct" when it falls? If anything deserves the label, he argues, it's the market's long climb.

Optimism in Action

Team Rule Breakers has tested this outlook before. In July 2006, a sharp sell-off had knocked most Rule Breakers picks down about 25% in three months. David told members it was a great time to buy, and named Intuitive Surgical (NASDAQ:ISRG) among the stocks to consider. By early 2026, the stock had risen roughly 53-fold from that moment.

The spring of 2009 felt even worse. The financial crisis had left the service's average pick down by about a third. The team kept recommending stocks anyway. Its March 2009 issue featured Green Mountain Coffee Roasters and MercadoLibre (NASDAQ:MELI). Within three years, both had risen more than fivefold. David later called it the best month in the service's history to pick stocks. Not every pick from those years bounced back, but both moments turned out to be great times to buy.

Team RB isn't alone in this. Team Hidden Gems keeps recommending stocks when sentiment sours, too. It also holds some cash so it can buy when prices fall. When the S&P 500 drops 10% to 20%, Motley Fool co-founder and CEO Tom Gardner suggests putting that cash back to work gradually. Buying great businesses while others are fearful is a Foolish habit (with a capital F!)

Image source: The Motley Fool.

Keep Your Rhythm

For most investors, optimism this week means sticking to the buying schedule you already have, whether that's every payday or every quarter. Let the calendar decide when you buy, not the headlines.

Some purchases will land before prices fall further. Others will land right before a day like Monday. Over many years, steady buyers tend to collect more shares at a lower average cost than investors waiting for an all-clear. In a dip, each dollar buys a bigger slice of the same great businesses.

The Case for Caution

A 10% drop can turn into something much worse. In 2022, the Nasdaq-100 lost about a third of its value. It took roughly two years to reclaim its old high. Buying through a stretch like that means watching new purchases lose value, sometimes for a long time. And yesterday's hotter-than-expected inflation report revived talk of higher interest rates, which could keep pressure on stocks.

A few guardrails help. Invest only money you won't need for at least three to five years. Keep each new position small. And spread your purchases out, so no single day decides your results.

Why We Keep Buying

Buying through this dip comes down to two beliefs. First, the businesses you own will be worth more in five or 10 years than they are today. Second, the market's long climb comes mostly from innovation and hard work. You don't need to know when the Nasdaq-100 will hit a new record. History suggests patient investors who kept buying have usually been glad they did.

The Rule Breakers Team has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intuitive Surgical and MercadoLibre. The Motley Fool recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.