When an investor or portfolio manager adheres to the belief in market efficiency—specifically the

strong form of the Efficient Market Hypothesis (EMH)—it implies that all information (public and

non-public) is fully reflected in security prices. This belief diminishes the value of active investment

strategies, such as fundamental or technical analysis, as these approaches presume the possibility of

identifying undervalued or overvalued securities.

As such, the logical approach in this scenario would be to adopt a passive investment strategy. This

includes constructing a portfolio of exchange-traded funds (ETFs) or index funds that replicate the

performance of a broad market index, such as the S&P/TSX Composite Index. A passive approach

aligns with the principle of market efficiency, as it avoids attempts to outperform the market, which

are considered futile under the EMH.

Reference:

Volume 2, Chapter 13: Fundamental and Technical Analysis, Efficient Market Hypothesis, Canadian

Securities Course​​.