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Andre Gide

Market Timing at Investing

Investing During Change of Economic Cycles - Market Timing Investment Strategy

 

Market timing is capturing of investment price movements "waves" trying to sell high and buy cheap. Simple as that.  Still it only sounds simple and especially for beginners.

Actually the simplest and often the most effective way of investing is long-term investment, when investments are acquired and hold for a long time. However, when many investors are looking at the long-term market charts, they want to make more money (and that is totally understandable), and it seems easy to do: all is needed just to sell the securities at the top of the cycle and buy low at the bottom. It would increase the return on investment impressively.

However, it should be remembered every investor would like to earn more - but the market is the only one for everybody, and the market is an average, which means that if someone earns more than the market, then someone has to earn and less than the market (average). And this average returns counts only if not excluding trading fees and other costs incurred during active investing process.

Therefore, market timing - "catching waves” is much more complex challenge that may look at the first glance. Every investor may succeed few times at market timing, but to achieve better investment performance over the long term is extremely difficult and only few succeeds.
 
However, there are those who believe that, based on technical analysis, economic analysis and other techniques a better result can be achieved. But if you think you are smarter and have more knowledge than the market average - so why not try?
 
However such investing style would not be recommended for beginners.



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