Efficient Market Hypothesis (EMH)

The Efficient Market Hypothesis (EMH) suggests that financial markets quickly and accurately incorporate all available information into asset prices. This means that stocks and other investments are generally fairly valued at any given moment, making it very difficult to consistently outperform the market through buying undervalued assets or timing trades. In essence, EMH implies that it's challenging to achieve above-average returns without taking on more risk, because market prices already reflect all known details, economic data, and investor expectations.