How Do You Use Efficient Market Theory For Easy Investing?
Efficient market theory suggests that the stock market is completely efficient; that is, the market reacts instantly to any and all new information. Hence, efficient market theory tells us that it is impossible for any person to outsmart the market to consistently time their investments to buy low and sell high. The steps in this article will tell you an easy investing technique that is based on efficient market theory. Buy as much of the market as possible with ETFs or Index Funds. Efficient market theory says that since, in the computer age, everyone has access to the same information, every stock is always price exactly as it should be. Therefore you shouldn’t spend your time trying to sniff out value stocks, but rather, you should buy as much of the market as you can and trust that the entire market will rise over the long run. Check for high fees. Although investing based on efficient market theory is rather passive and therefore a rather easy investing technique, you need to keep
