The Dangers of Market Timing
From Ken Little,
Market timing may be the two most dangerous words in investing, especially when practiced by beginners.
Market timing is the strategy of attempting to predict future price movements through use of various fundamental and technical analysis tools.
The real benefit of knowing what is going to happen is that your return from buying a stock before it takes off is obviously better than if you have to buy the stock on its way up.
Buy Low, Sell High
Market timers are the ultimate �buy low and sell high� traders. Day traders, who move in and out of positions in minutes or hours, are the extreme market timers. They look for small profits by the dozens each day by capitalizing on swings in a stock�s price.
Most market timers operate on a longer time line, but may move in and out of a stock quickly if they perceive an opportunity.
There is some controversy about market timing.
Many investors believe that over time you can�t successfully predict market movements. Market timing becomes more of a gamble in their opinion than a legitimate investing strategy.
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