Efficient Market Hypothesis
 
The efficient market hypothesis (EMH) is an investment theory which states that it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information.  According to the EMH, stocks always trade at their fair value on stock exchanges, making it impossible for investors to either purchase undervalued stocks or sell stocks for inflated prices.  As such, it should be impossible to outperform the overall market through expert stock selection or market timing, and the only way an investor can possibly obtain higher returns is by purchasing riskier investments.