Four Historical Patterns in the Markets for Investors to Know

Market performance regularly runs a gamut of annual dips and flat cycles to corrections and crashes. Investors who know the patterns can set reasonable expectations.

Colorful wave patterns from orange to blue.
(Image credit: Getty Images)

After a few great years of positive returns, it can be easy to forget the reality that markets don’t always go up. To put it simply, the market can go up, down or stay flat for an extended period. Past performance cannot predict future performance. But it can help set reasonable expectations.

Here is a brief review of five historical patterns that investors should know in order to maintain proper expectations. I will present the evidence and let you make the conclusions.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Save up to 74%

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

Sign up

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To continue reading this article
please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Mike Decker, NSSA®
Author, Wealth Planner and Money Manager, Kedrec LLC

Mike Decker is the author of the book How to Retire on Time, creator of the Functional Wealth Protocol, and the founder of Kedrec, a Registered Investment Advisory firm located in Kansas that specializes in comprehensive wealth planning and management at a flat fee. He specializes in creating retirement plans designed to last longer than you™, without annuitized income streams or stock/bond portfolios. In addition to helping people achieve their financial goals, Decker continues to act as a national coach to other financial advisers and frequently contributes to nationally recognized publications.