The stock market has been on quite a run the last three years.
And everyone wants to know if it will continue.
No one knows if it will.
One of the most important things you can do as an investor is make sure your portfolio is built for random returns.
This randomness can keep people from investing.
But those who have stuck with cash over the decades have not kept their money safe.
They have watched their wealth shrink.
Take a look at that black bar chart on the right side of the above chart.1
If you’ve just held cash the last 30 years, you have lost more than half of the purchasing power of your dollars.
That’s not being conservative. That’s a kind of “losing” money too.
If someone told that person that they could lose half their money by doing nothing, it might help them reassess the volatility of stocks.
Be a rational investor within the randomness.
The unpredictability of the stock market and the reality of inflation should cause you to seek out how to manage the risks of investing and not investing because the cost of not investing has been substantial.
Yoda said “Do or do not. There is no try.”
You don’t have to be an Investment Jedi Master and treat all of your money within the binary of do or do not.
Rational investors look at the evidence. They don't go to extremes of paralyzing fear or a gambler’s frenzy. They may opt for “do” on investing some of their money and “do not” on other parts of their wealth.
Let me clear something up, though. It’s not that the stock market gains and losses are built on random forces or just doing whatever a secret cabal of rich people want it to do.
Earnings have much to say about the trajectory of stock prices. Matt Cerminaro, a Data Research Associate in wealth management, illustrates this well in the below chart2:
Earnings, therefore, should be one of the things rational investors pay attention to.
Rational investors focus primarily on their own investment timeline and financial goals, not whether or not the stock market has a fourth year in a row of gains.
I’ve heard it said, “I don't know anyone who knows someone who has been able to time the market. And I think if you can't time the market, it's not a good idea to try."
You need a plan, not a prophet.
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Sources:
- Blackrock’s “Student of the Market: Market Outlook” Q1 of 2026. Accessed online: https://www.blackrock.com/us/financial-professionals/literature/presentation/uswa-outlook-presentation.pdf
- Chart from “Earnings Drive Stocks” in an email from Matt on February 10, 2026.