Inefficient market
Inefficient Market
Inefficient market.
In an inefficient market, investors may not have enough information about the securities in that market to make informed decisions about what to buy or the price to pay.
Markets in emerging nations may be inefficient, since securities laws may not require issuing companies to disclose relevant information. In addition, few analysts follow the securities being traded there.
Similarly, there can be inefficient markets for stocks in new companies, particularly for new companies in new industries that aren't widely analyzed.
An inefficient market is the opposite of an efficient one, where enormous amounts of information are available for investors who choose to use it.