Efficient Market Hypothesis (EMH)

The efficient market hypothesis (EMH) is an economic theory stipulating that the financial markets reflect all available information on the price of assets at any given time. Initially developed by economist Eugene Fama in the ‘60s, the theory states that it is nearly impossible for investors to gain an edge over the market in the long run. Assets will be valued at their fair price, as all known information will be traded on until it ceases to be useful.