What is an efficient market and how does it affect individual investors?
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DEFINITION of 'Efficient Market Hypothesis - EMH' The Efficient Market Hypothesis (EMH) is an investment theory whereby share prices reflect all information and consistent alpha generation is impossible.
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The efficient-market hypothesis is a hypothesis in financial economics that states that asset prices reflect all available information. A direct implication is that it is impossible to "beat the market" consistently on a risk-adjusted basis since market prices should only react to new information.
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