The Efficient Markets Hypothesis: Act As If It's True

DeLong also links to an excellent piece by Justin Fox. Bottom line: The Efficient Markets Hypothesis has its problems, but even so, low-cost index funds remain your best bet:

The message that the behavioral finance guys have for investors is that yes, you can beat the market, but--for reasons that are essential to the whole behavioralist case--you almost certainly won't. As a result, they end up offering much of the same investment advice that the efficient markets folks do.

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