
The Secret to Stress-Free Investing, Ep #262
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このコンテンツについて
- [00:00] Your foundation of knowledge to experience stress-free investing.
- [05:58] Understanding Efficient Market Hypothesis (EMH).
- [09:40] The power of market consensus.
- [11:55] How fast does the stock market react?
- [13:12] Efficient market hypothesis simplified.
- [17:27] The myth of market-beating funds.
- [19:22] Reduce investment stress by demystifying the market.
Does Investing Have to Be One More Worry? Retirement account fluctuations, big market drops like those in 2008, COVID-19, and trade war-related selloffs are enough to send anyone’s blood pressure soaring. One of the most important concepts in modern finance: the Efficient Market Hypothesis (EMH), developed by Nobel laureate Eugene Fama. In simple terms, the EMH says that all the available information about any publicly traded company is already reflected in its stock price. Let’s use Apple as an example. Every day, millions of shares, worth billions of dollars, change hands, each trade representing someone who thinks Apple is fairly priced, and someone else who disagrees. Crucially, both buyers and sellers have access to the same information. No one has a crystal ball; everyone’s predictions about future sales and profits are just that—educated guesses. Why Beating the Market Is So Hard In a 20-year analysis of actively managed mutual funds, those run by managers trying to beat the market through skillful stock picking. Of the 1,667 funds analyzed on January 1, 2004, just 48% were still around 20 years later (the rest closed or merged after poor performance). Of those survivors, only 16% managed to outperform the market—a sliver of winners, and no guarantee that their outperformance was due to skill rather than luck. Over longer periods, the odds get even worse. The market’s efficiency means that news, good or bad, gets priced in fast. By the time you read about a hot tip or see a magazine
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