Market efficiency hypothesis

The Market Efficiency Hypothesis suggests that financial markets quickly & accurately incorporate all available information into asset prices. This means that it's very difficult to consistently outperform the market through individual analysis or predictions, since prices already reflect true value based on known data. There are different levels—weak, semi-strong, and strong efficiency—depending on what information is considered. In essence, if markets are efficient, no investor has a consistent advantage because prices always reflect all relevant information at any given moment.