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What Is the Random Walk Hypothesis?

By Anders Bylund – Updated Feb 25, 2025 at 9:43AM

Key Points

  • Random walk hypothesis suggests stock market movements are unpredictable, impacting active trading.
  • This theory supports long-term investment strategies, like buy-and-hold, over short-term speculation.
  • Index funds, which emulate overall market performance, are recommended due to market randomness.
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