Stock Market Timing
Sell in May and go away!
Investors who use a stock market timing strategy attempting to predict the future direction of a market, typically through the use of technical indicators or economic data.
Switching among mutual fund asset classes in an attempt to profit from the changes in their market outlook is also an example of this strategy.
Whether market timing is possible is really a matter of opinion, but stock traders rely on timing to be able to enter and exit trades at a profit. The difficulty is that you have to be right twice, once when you buy, and again when you sell.
Neverless, ther are a multitude of websites that claim that they can predict market changes and offer stock market timing advice and timing software. One wonders why they don't keep the information to themselves and make a fortune!
| It's time in the market - not market timing!
|
As the above slogan suggests, for the value investor the evidence is clear, investing for the long-run is the best strategy.
This has the benefit of not having to spend time stuying the market on a daily basis and knowing that they have provided for a margin of safety.
Certainly it make sense to keep an eye on the stock market cycles. The best time to buy is when values have stopped falling and everyone else is still bearish. It applies irrespective of whether it is refers to the whole market or individual stocks.
This type of investor is called a contrarian since they are going against the common market sentiment at the time.
They try to sell when values are climbing fastest and sentiment is most bullish. This is a signal that suggests the market is getting ready to reverse.
Investors who recognize the different parts of a market cycle are more able to take advantage of them as a stock market timing signal. They are also less likely to get fooled into buying at the worst possible time.
This to me is a better strategy.
Return from Stock Market Timing to Best Investment Strategies
| 
