Market Timing
Market timing is the practice of trying to predict when markets will rise or fall so you can buy low and sell high.
1 min read Learning to Invest
What it means
Market timing is the practice of trying to predict when markets will rise or fall so you can buy low and sell high. While it sounds logical, consistently getting those decisions right is extremely difficult.
Example
An investor sells expecting prices to fall, but the market continues rising before they buy back in.
Why it matters
Understanding market timing helps explain why many investors stay invested instead of trying to predict markets.
Missing only a few of the market's best days can have a big impact on long-term returns.
Can anyone consistently time the market?
There's little evidence that people can reliably do so over long periods.