Efficient Market Hypothesis, Efficient Market Theory (Part 1)

What Is Efficient Market Theory?
Efficient market theory holds that markets operate efficiently because at any given time, all publicly known information is factored into the price of any given asset. This means that an investor can’t get ahead of the market by trading on new information because every other trader is doing the same thing.


It’s important to note that efficient market theory doesn’t argue that the market will get things right at any specific moment. Markets can overvalue or undervalue an asset. It argues, instead, that the market will get things right over time. If an asset strays too far from its value, the market will eventually correct that mistake.

for producers Equilibrium click:    • Producers' Equilibrium  





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