EMH says that you cannot make a return that will consistently beat the market. however, there...

EMH says that you cannot make a return that will consistently beat the market. however, there are behavioral and institutional reasons why that may not bethe case. by using efficient market hypothesis, how can Walmart beat the market by inefficiency? and how can Target Corp beat the market by inefficiency? identify few strategies of emh theory so you can justify your attempt to beat the market. this is not a passive strategy, you are seeking stocks to buy and stocks to sell.

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Ans:-

The efficient market hypothesis states that stocks in the exchange market platform traded at their fair market values.Market is efficient when it reflects true value of stocks of companies.Market remain inefficient when it reflects false value of stocks.
According to EMH theory market is sensitive to all public information and share price can deviate from their fair value. One can purchase undervalued stocks and sell those at the inflated price to beat the market.
There are so many investors like warrent buffet have proved that they have beat the market.The main strategies here is to choose low cost investment avenues or passive portfolios, which can mitigate loss and in a mean while can genrate high return.
Research says that the low cost index funds or exchange traded funds have outperformed best than large cap funds in market randomness..
So beating market is possible for investors who adopt low cost investment strategies or passive portfolio.

jeff jeffy answered 1 year ago

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