@ClementsMoney Hump Day Help – Market Efficiency
Welcome to the Hump Day Help. Each Wednesday we take one of the weekly actions from Jonathan Clements‘ blog Humble Dollar and “militarize” it for you. Jonathan Clements was a longtime personal finance columnist for The Wall Street Journal, and he offers great advice at the best price you can get…free. Here is this week’s Hump Day Help:
Normally we give you an action, but his last action was about losing your job, which probably isn’t happening to many of us in the military. Instead we’ll go with his “THINK” section and give you something to think about…
MARKET EFFICIENCY. As news breaks that affect the economy and individual companies, investors immediately buy and sell stocks in response, so share prices reflect all publicly available information. Because the market is so efficient, it’s extraordinarily hard for investors to beat the market, especially after factoring in their investment costs.
This is why you don’t try to beat the market, but instead join it by investing in index mutual funds or exchange-traded funds (ETFs).