market timing


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Related to market timing: Late trading

Market Timer

A money manager who seeks a profit for clients from his/her own ability to predict when the market will climb and fall. That is, a market timer buys securities when he/she believes that they are about to increase in price and sells when he/she believes their prices will fall. A market timer may use technical analysis to discern future price movements.

market timing

The purchase and sale of securities based on short-term price patterns as well as on asset values. Some analysts use fundamental analysis to select the securities to purchase or sell; then they rely on market timing to decide when to trade those securities. Also called timing.
Is market timing best left to the experts, or can I use it when determining when to buy or sell securities?

To put it bluntly, the most important investment advice for the serious investor is that it is "time in the market," not "timing the market," that is the key to long-term successful investing.

George Riles, First Vice President and Resident Manager, Merrill Lynch, Albany, GA

Market timing.

Market timing means trying to anticipate the point at which a market has hit, or is about to hit, a high or low turning point, based on historical patterns, technical analysis, or other factors.

Market timers try to buy as the market turns up and sell before the market turns down. It's the anticipated change in direction rather than the amount of time that passes between those changes that's significant for these investors.

The term is sometimes used in a negative sense to refer to a trading strategy that aims for quick profits by taking advantage of short-term changes in securities' prices.

Market timers, sometimes known as day traders, trade electronically. They try to buy low and sell high by taking advantage of second-to-second or minute-to-minute changes in the financial marketplace. They base decisions on information such as a forecast on interest rates or a sell-off in a particular market sector.

References in periodicals archive ?
This investment strategy is known as market timing, the practice of moving in and out of the market based on predicting when the market will shift.
This study is an attempt to investigate the validity of CAPM, Fama and French three-factor model and the presence of market timing in the emerging stock market of Pakistan.
Actually, market timing is largely a function of your financial goal and state of the market's prevailing psychology.
The Gurtin paper said research had documented retail investors' poor market timing in both fixed income and equity mutual funds, and in both passively and actively managed ones.
Even so-called market timing experts can't consistently predict when to move in and out of the market.
They argue that the negative correlation between future excess long-term bond returns and the ratio of long-term debt issues to total debt issues is driven by aggregate pseudo market timing. In other words, firms are just reacting to (as opposed to forecasting) the increase in the relative cost of long-term debt (due to the monetary and fiscal policy of the United States government during the early 1980s) by issuing more short-term debt.
The insurers argued, among other things, that Bear Stearns could not recoup the $160 million payment as a matter of public policy since the SEC found Bear Stearns willfully violated securities laws by facilitating late trading and market timing by hedge funds.
Keywords: Market conditions, Interest rates, Initial Public Offerings, Market timing, Capital structure
In this book, he analyzes the causes of the late trading and market timing scandal, examines the scandal's effects on investors, and explores the regulatory response by the New York Attorney General, the SEC, and NASD/FINRA.
We study market timing and peeking order in a sample of debt and equity issues and share repurchases of Canadian firms from 1998 to 2007.
We would also subscribe to the demonstrable notion that "timing is everything" and applies to entrepreneurs who have demonstrated market timing skills.