A portfolio manager at an investment firm is analyzing the behavior of stocks in various...

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.