Predictability of Stock Prices
Jeovanni Guzman
McNair Summer Research
Predicting prices in the stock market is one of the biggest puzzles financial economists face. This project is an overview of the literature concerned with exactly that enigma. I will start the project by introducing the most dominant theory related to stock prices: the Efficient Market Hypothesis. Then, I will give an overview of fundamental and technical analysis. The second part of the paper focuses on the empirical evidence supporting or rejecting these methods, which can determine their comparative applicability in predicting stock market prices. By the end of the paper I will attempt to answer the fundamental question: what is the best way to predict stock prices?