Hugely important to distinguish between investing and trading here. But the short answer is that it’d be near impossible to lose money systematically without knowing the inverse (more profitable) strategy.
Consider the scenario where a 22-year-old teacher named Warren, who knows nothing about finance, takes 80% of his annual salary and buys random stocks with the intent to hold until retirement age (reinvesting all dividends). It would be extraordinarily fluky for him to not make solid returns over the long-run with this approach, let alone break even or lose money, as all publicly traded stocks have reasonably high positive expected value.
Now consider derivatives trading. Even if we assume no transaction costs, it’d be near-impossible for Warren to not lose money over the long-run by partaking in lots of random bets with, at best, 0 expected value. Your term, “the market” is problematic because “the market” can act as a bank or a poker table depending on the purchases of the investor.
EMH implies that it’s not easy to make a living through financial trading. It’s incredibly easy to slowly leak money to those who are making a living at it, though. Unlike buying stocks, bonds, etc., financial trading is zero-sum.
Hugely important to distinguish between investing and trading here. But the short answer is that it’d be near impossible to lose money systematically without knowing the inverse (more profitable) strategy.
Consider the scenario where a 22-year-old teacher named Warren, who knows nothing about finance, takes 80% of his annual salary and buys random stocks with the intent to hold until retirement age (reinvesting all dividends). It would be extraordinarily fluky for him to not make solid returns over the long-run with this approach, let alone break even or lose money, as all publicly traded stocks have reasonably high positive expected value.
Now consider derivatives trading. Even if we assume no transaction costs, it’d be near-impossible for Warren to not lose money over the long-run by partaking in lots of random bets with, at best, 0 expected value. Your term, “the market” is problematic because “the market” can act as a bank or a poker table depending on the purchases of the investor.
EMH implies that it’s not easy to make a living through financial trading. It’s incredibly easy to slowly leak money to those who are making a living at it, though. Unlike buying stocks, bonds, etc., financial trading is zero-sum.