From Morningstar: 2024-09-11 06:16:00

The article from Financial Times warns investors that past performance of stocks is not a reliable indicator of future success. Research spanning decades by academics shows that while short-term stock prices are unpredictable, long-term trends can present opportunities to invest in undervalued companies. Intermediate-term price movements also show some predictability, but timing is key. Despite this, relying solely on historical stock market returns for investment decisions may no longer be as effective due to market efficiency and widespread knowledge of these strategies. In conclusion, investors may be better off focusing on the fundamentals of good businesses rather than trying to time the market based on past performance data.



Read more at Morningstar: Should You Ignore Past Stock Market Returns?