Efficient Market Hypothesis (EMH)

The efficient market hypothesis holds that asset prices fully reflect all available information at all times, which implies it should be impossible to consistently beat the market through stock picking or market timing, since any advantage would already be priced in. It comes in weak, semi-strong, and strong forms depending on what kind of information is assumed to be reflected.

EMH is widely taught but also widely debated: recurring market bubbles, crashes, and documented pricing anomalies have led many researchers (particularly in behavioral finance) to argue markets are efficient most of the time but not always, which is a middle ground closer to how most professional investors actually operate.