Beating the Market
Even before the recent meltdown, the stock market was hard to read. A market strategist explains why.
THE SOURCE: “The Elusiveness of Investment Skill” by Robert A. Jaeger, in The Journal of Wealth Management, Fall 2008.
You’ve heard it a million times: Nobody can beat the stock market, so just stash your investment dollars in index mutual funds and settle for “the average return.” Behind that nostrum is the so-called efficient market theory, which holds that stock prices already reflect all the available information about a company, making it impossible for anybody to get a leg up.
Efficient market theory no longer dominates the academic...