Introducing Efficient Markets

In this video I introduce the concept of efficient markets using an example from when I was a kid - yard sales!

The efficient markets theory (Efficient Market Hypothesis), is one of the most important ideas in all of finance.  Once you can grasp the idea that markets are a very efficient pricing machine, it unlocks the answer to a lot of other important questions:

1) Why do stocks return more than bonds?  

2) Why do professional investment managers struggle to beat plain old index funds?  

3) Why should we diversify vs. own a small subset of stocks or a concentrated portfolio?  

4) How do I pick an investment strategy where I can just invest and relax?

I will discuss these questions and more in future videos.  

Thanks for watching!

Mark