Summary of The Efficient Market Theory

The efficient market theory holds that market prices reflect all the known information about a security. The more quickly and completely information reaches the market, the more efficient the market becomes; therefore, the theory holds, there is little chance of actually beating an efficient market. And yet, there’s still an incredible amount of money being spent trying to beat the market. The efficiency theory certainly has its share of critics, but if it’s right, that’s a lot of money being thrown out the window.