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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. I hope you enjoy this video. Leave comments, feedback, and suggestions below. Thanks, Mark

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