Efficient Markets Hypothesis

The Efficient Markets Hypothesis (EMH) suggests that financial markets quickly and accurately incorporate all available information into asset prices. As a result, it's impossible to consistently outperform the market through expert analysis or stock picking, because any new data is immediately reflected in prices. In other words, stock prices at any given moment already account for everything known, making it very challenging for investors to gain an advantage unless they take on extra risk or access insider information. EMH emphasizes that markets are generally efficient but doesn't claim they are perfect or free from occasional mispricings.