The Efficient Market Hypothesis (EMH) is the theory that asset prices fully reflect all available information, making it impossible to consistently outperform the market through stock selection or market timing. It exists in weak, semi-strong, and strong forms.
Example
“A passive index fund investor relied on the Efficient Market Hypothesis, arguing that since stock prices already reflect all public information, paying for active management was unlikely to beat the S&P 500 over time.”