Market timing is an attempt to determine when to buy or sell assets are at their peaks or valleys and to buy and sell accordingly. It is not quite the opposite of the buy and hold/asset allocate/regular investment philosophy I believe in, but rather requires an investor to have exceptional skill in determining the market tops and bottoms.

Notice that I wrote, “tops and bottoms.”

Getting out of a market when it’s high isn’t enough. In order to successfully pull off market timing, you must also identify a low as a time to get back in.

Time after time it’s been shown that successful timing of the market is close to impossible; when I thought about it recently I realized that in order to successfully time the market, you must time the market at least twice. Once is not enough.

Maybe that’s why so few people have a successful track record of doing it.

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