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Lloyd Jones

Investment Dictionary


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Market Timing

 

Market timing is investor's actions when investments are switched between asset classes and may be a part of investment strategy. For example, if investor sees that stocks are very high and economical downturn is highly probable he sells the stocks and buys some safe bonds instead. 

 

In practice market timing is highly debatable and there are different approaches to it. Is it possible or not, there are very few investors who doesn’t believe they can do. And some do succeed in it (the question is, how many times) some not – the market is one and someone has to lose, some to win.

 

The biggest issue with market timing is psychology, because when the market is really low and stocks are cheap, investors afraid to make investments in riskier securities and holds to the safest asset classes or residue of money in cash.

 

Read more about market timing at investing.

 

 






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