EMH (Efficient Market Hypothesis)

The Efficient Market Hypothesis (EMH) suggests that stock prices fully reflect all available information at any given time. Because of this, it's very difficult to consistently outperform the market through stock picking or timing, as any new information is quickly incorporated into prices. Essentially, markets are efficient in processing information, making it challenging for investors to gain an advantage by exploiting mispricings. EMH supports the idea that a passive investment strategy, like index funds, typically leads to better long-term results than trying to beat the market actively.