3 ms·
that's the paradox of the efficient market hypothesis - if everyone is a passive investor then who keeps the market efficient? (...which is a common counter-ar
by markovbling 12y ago
that's the paradox of the efficient market hypothesis - if everyone is a passive investor then who keeps the market efficient?
(...which is a common counter-argument for the markets being efficient. The reasoning behind passive investment is that, net of fees, it's difficult to out-perform the market although of course, everyone can't outperform the market because everyone collectively IS the market)
- j_lev 12y agoCompanies themselves buy and sell their own stock when they believe it is under/overvalued. And there will always be people out there who believe they have an edge and can pick undervalued stocks. These days I think in reality most people who have been into indexing for a while give themselves a bit of play money to invest in something more speculative.