The discovery of an algorithm that would consistently generate outsized returns would be the holy grail of investing. The individual who came up with such an algorithm and published the methodology in a peer-reviewed journal would be a serious candidate for the Nobel Memorial Prize in Economic Sciences. To date, no one has done so.

This is not surprising. As my colleague Larry Swedroe noted, the market is “forward looking” and incorporates all publicly available information into current prices. The issue is not (as many investors believe) whether news is good or bad. It’s whether the news is “better or worse than already expected.”

Read the rest of the article at The Huffington Post.

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