The implications of market efficiency for investors are sweeping. If asset prices always fully reflect available information, there are only two ways to profit: by taking a risk that has been priced into the market, which can be done cheaply with an index fund. If the market is not efficient, then it should be possible to profit by consistently selecting undervalued stocks, and timing the market.

Catch up on our latest investing advice, insights and white papers here: 

Follow me on Twitter: