Are There Patterns to the Stock Market?

Are There Patterns to the Stock Market?

March 23, 2023

Full Trasncript:

Hello, welcome to Arista Advice! Question of the week is: "Paul, are there patterns to the stock market?" Well, there's an abundance of information and data that many people pour-over read to try to outguess or outsmart the stock market. Folks, that stuff doesn't work. Never has, never will. It may work in the short-term, but it does not work in the long-term. 

As Warren Buffett said last week, he was asked, "If you had a million dollars, Mr. Buffett, what would you do?" and he said, "I would buy the market, set it, and forget it." That's how long-term wealth is generated and created in many instances. I have, as you can see, a chart here. This chart will help us understand that for every two up, there's one down. The graph shows that the past three years have followed this two years up and one year down trend, in alignment with the history of returns.

Going all the way back to 1926, as you can see on this chart, the normal distribution is a positive return of 10-20% 21 different times of all of the years. The second is 16 at a 20-30%. 3rd is 15 at 30%-40%, and then in fourth place, you have zero to ten and then negative ten to zero, so there is heavy distribution that the stock market on any given year is a positive number. We know this that 75% of the time the stock market is positive and the other 25%, the market is negative. 

You got to take the good, and you got to take the negative. But generally speaking, the positives outweigh the negatives. Hope this is helpful to help you keep a long-term perspective. And remember to go to to get other videos, tools, tips, and resources to help you live a life of significance.