Stock Market Timing- Does It Ever Work

Should you try to time the market?

by admin on January 27, 2010

I don’t know any serious investor who hasn’t, at one time or another, questioned whether he or she could time the stock market.

There are enough stock market “pros” out there, hawking newsletters and advice. While the better ones claim that no one can “time” the market, the timing of their newsletters make it seem as if they know something that you don’t.

Do they? Well, they probably know more about certain stocks or trends that they see. They may have researched companies, or sat in on company earnings conference calls. Perhaps they know people who work at a particular company (let’s hope they’re not trading on insider information). Or, perhaps they’re the ones making the market for a particular stock, buying and selling.

But no one, to the best of my knowledge, has been able to figure out how to time the stock market. And, I’ve never met anyone who could tell me what lottery tickets to buy for tomorrow’s drawing.

Which is why it’s always disheartening to hear investors advise buying or selling based on what looks like market timing. And it makes me feel worse to know some folks are listening.

When it comes to investing in the stock market, here’s what I believe in: Knowledge creates opportunity.

  • I like knowing about the products I use and the technology used to make them.
  • I like knowing how industries intersect and what various companies and countries are using to enhance those connections.
  • I like watching what my teenagers and their friends are doing with their friends, and seeing how they consumer technology and media.
  • And, I like reading about trends that define the next generation.

I don’t time the stock market (I’d be phenomenally bad at it.) But I do try to educate myself enough to take advantage of opportunities that come up – and they do… every day.

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