FundRobot » Indexed Funds » What is a strong efficient market?

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Old   #1 (permalink)
 
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Default a strong efficient market

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Can we investors beat the market if its strong




And what's the diffence between semi strong and strong
TheGreat33 is offline   Reply With Quote
Old   #2 (permalink)
 
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Default a strong efficient market

Yes.

It's possible for investors to beat a strong market. In any market (weak, strong, or moderate), some companies will perform better than others. "The market" is always an average of multiple companies. The trick to beating any market is to identify the better-performing companies and invest in them...and to identify the weaker companies and not invest in them.

There's no formal definition of a "strong" or "semi-strong" market. If you assume that the "average" market over time rises perhaps 6%-7% a year, then a semi-strong market would be slightly above that, and a strong market would be even higher. So--and again, there's no formal definition--you might say that a semi-strong market might be rising 9%-10% a year while a strong market would be rising 12% or more per year. (In the past 12 months, depending on which index you use, stocks are up 20%-25%--making the past 12 months definitely a "strong" market.)

Hope that helps.
Tech009 is offline   Reply With Quote
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Old   #3 (permalink)
 
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Default a strong efficient market

Why do you think Donald answered a question he doesn't even understand?

Semi-strong efficient market means that all public information is incorporated into a security's price. Strong form efficient market means all information whether public or private is incorporated into its price. If the market is sem-strong efficient then beating the market on a risk-adjusted basis is impossible based on public information. It means reading edgar, annual reports, Cramer, WSJ, my great advice, etc is useless but insider information can earn you outsized returns. If the market is strong form efficient, you can't beat the market even by having access to private information. If the market is strong form efficient all you should do is invest in index funds and all the research in the world is wasted time.

You have to be a dingbat academic to believe that the market is semi string efficient and completely cluesless to believe the market is strong form efficient.
Cash754 is offline   Reply With Quote
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