Investing & Markets

Own assets that compound

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Concept 17 of 21

debated

Efficient market hypothesis

Prices already bake in what is known, so finding a free lunch is rare and shrinking.

Definition

The idea that asset prices reflect all available information, so consistently beating the market through analysis or timing is extremely difficult.

Step 1

Predict first

In one or two sentences, what do you think this concept means? Wrong is fine; the small struggle is what makes the answer stick.