The efficient market hypothesis is an argument used in favor of the buy and hold strategy, but it is not the only support for the buy and hold technique. In fact, many of the most outspoken advocates of buy and hold reject the efficient market hypothesis (or EMH).
Nonetheless, the EMH holds that the market price for a stock already reflects all known information about the company, market and competition. The prices change very quickly as new information is added, discovered or created, and therefore, there is no point trying to outdo the market.
This philosophy has proven to have its problems, and is not accepted without reservation because of anomalies and situations in which it proves incorrect; it is nonetheless
No comments:
Post a Comment