Market Efficiency

What Does Market Efficiency Mean?
The degree to which stock prices reflect all available, relevant information.

Investopedia explains Market Efficiency
Market efficiency has varying degrees: strong, semi-strong, and weak. Stock prices in a perfectly efficient market reflect all available information. These differing levels, however, suggest that the responsiveness of stock prices to relevant information may vary.

The efficient market hypothesis (EMH), a controversial principle stemming from the theory of market efficiency, states that a market cannot be outperformed because all available information is already built into all stock prices. Practitioners and scholars alike have a wide range of viewpoints as to how efficient the market actually is.

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