Note: This is post #96 in a weekly video series on basic economics.
The stock market is prone to certain anomalies. There’s the Monday Effect (where stocks fall more on Mondays), the January Effect (which says that stocks surge higher in that month), and the Momentum Effect (where past stock performance predicts future performance, at least a bit). Can’t a savvy investor take advantage of these anomalies to “beat” the market?
Probably not.
“Despite its flaws, the market is still more rational than you. Don’t forget,” says economist Tyler Cowen in the video by Marginal Revolution University.
(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)
Click here to see other videos in the Introduction to Economics series.
