Market Timing

What Does Market Timing Mean?

Market timing involves buying and selling securities, such as bonds or stocks, based on active monitoring of financial trends. However, there is no consensus on the effectiveness of this approach.

It is also referred to as tactical asset allocation or active investing.

Insuranceopedia Explains Market Timing

The goal of market timing is to buy securities at a low price and sell them at a higher price, capitalizing on fluctuations in the stock market or the economy. A market timer is expected to be well-versed in market trends, and those who do not regularly monitor financial trends are typically advised against engaging in this practice.

Experts remain divided on market timing. Proponents believe that individuals can make informed financial predictions, while critics argue that it is impossible to fully predict the market and recommend opting for more conservative investments instead.