Random Walk Theory suggests that stock prices move in a random and unpredictable manner, similar to a person taking random steps. This theory implies that past price movements cannot reliably predict future prices, making it difficult for investors to outperform the market consistently. The theory is often associated with the efficient market hypothesis, which states that all available information is already reflected in stock prices. As a result, attempts to time the market or pick individual stocks are unlikely to yield better returns than simply investing in a broad market index, such as the S&P 500.