– Glossary

Efficient Market Hypothesis (EMH)

The EMH view of the market believes that information is instantaneously absorbed into stock prices as soon as it’s released to the public. The weak form of EMH suggests that technical analysis adds no value to the market. The semi-strong form of EMH suggests that fundamental analysis cannot provide an edge in investment selection. The strong form of EMH suggests that even insiders cannot make an above-average profit from their knowledge since it is already factored into the share price. EMH assumes the market is efficient and thus random in the direction of future prices.

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