According to the efficient markets hypothesis, stocks follow a random walk so that stocks that increase in price one year are more likely to increase than decrease in the next year.

The efficient markets hypothesis suggests that stock prices fully reflect all available information, meaning future price movements are unpredictable and do not depend on past trends. Stocks following a random walk implies that past movements do not predict future directions, contradicting the idea that stocks increasing in price one year are more likely to increase in the next.