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Stuart Ritchie

By: Stuart Ritchie

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November 25th, 2019

Stop looking for patterns in the stock market [Video]

Investment | Financial Planning

Quit the stock market at the top and buy back in again at the bottom.

It sounds great doesn’t it?

But while the temptation to try to time the market is considerable...

The reality rarely lives up to the promise.

In his book Odds On, Matt Hall talks about Eugene Fama’s Efficient Market Hypothesis.

That is, markets are efficient enough that it’s extremely difficult (and maybe impossible)...

For any investor to outsmart them consistently.

Share prices reflect everything you or I know about the share.

All the information that we’ve got has already been priced in.

Tomorrow we might have good news — the prices go up...

Or we might have bad news — and the price will go down.

We can’t forecast it.

So, trying to pick stocks is simply a waste of our time.



The financial markets and the global economy are not only vast; they’re also intricately complex.

They’re chaotic.

We cannot make order out of them.

The best thing to do is stop looking for patterns in the stock market.

Keep a long-term view and buy the haystack.

Stop looking for the needle.

This approach might sound simple.

But there is often a mismatch between what science tells us, and what people do.

Having a financial adviser when you’re not necessarily thinking straight...

May just be extremely valuable.


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About Stuart Ritchie

Stuart Ritchie is a Chartered Financial Planner, APFS, Chartered Wealth Manager, Chartered FCSI

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