Behavioural Finance

Myth BUSTED: ETFs and Market Efficiency

The Myth: Everyone is piling into ETFs, and that makes stock markets less efficient. The argument: The more people invest through indexes and ETFs, the fewer people there are scrutinizing the fundamentals of stock prices to figure out if individual stocks are cheap or expensive. That must make it easier to pick stocks, right?

Behavioural Finance

What is Market Efficiency and How it Works

This discussion begins in 1906, at the Plymouth County Fair in England. Sir Francis Galton walks by a contest, where participants are asked to guess the weight of an ox. There are over 800 guesses; some from butchers and farmers, and many more from men and women with no expertise to inform their guesses.