Financial Quotient

What is market timing?

Market timing is the strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements. When it comes to investing, everyone wants to buy an asset at its lowest price and sell it at its highest. This is referred to as timing the market, which naturally leads to investors getting very concerned about short-term fluctuations.

The question is, how certain are we in finding the right moment to enter the market at its lowest and then exit at the perfect time? How many times have investors got it all wrong?

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A version of this article appeared in the print edition of The Sunday Times on September 30, 2018, with the headline 'What is market timing?'. Print Edition | Subscribe