| How To Understand Market Timing |
| Articles - Retirement |
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We all love easy money. What's not to like? It is often perceived that stock market is the easiest way to make a few easy bucks.
We all love easy money. What's not to like? It is often perceived that stock market is the easiest way to make a few easy bucks. Even professionals and people with years of experience go wrong while trying to make a calculated risk. Marketing timing is nothing but the attempt to predict or guess the future movements of the stock prices using technical and analytical tools. It is often perceived that the predictions made are nothing but shots in the dark and are said to be fluke. Nothing can be farther from the truth. Most market timers work on the policy of buying when the stock is low and selling when the stock is on its way up. Many market timers look to make a number of small profits by changing their positions every few minutes than waiting for longer periods in the hope of making a profit. However, there are market timers who operate on longer timeline but there is more risk involved here as the insiders feel that the stock market cannot really be predicted over a longer period of time. Movies and books show a rosy picture of people just buying some shares and its prices skyrocketing. Surely it happens, but only in fairytales. The amount of study and research involved is often not seen. So, if you want to try your hand at market timing, be sure you have done your homework thoroughly. The most important virtue to have and put it constantly in practice is discipline. More often than not people get carried away and act on impulse or on some hot tip given by a trend, knowing that the tip is not backed by research or analysis. Though it sometimes does pay off, there is more chance of you falling flat on your face and losing the money you have put in it. Practicing discipline and religiously following the market trends in the system of your choice and then making a educated and calculated guess is the only way you can be as sure as you can ever be to make money in the stock market. While you are still learning the tricks of the trade it is best to go with the expert opinion on the trends and movements of the stock market. Stock market timing is also an art and a science, an art that you perfect over the years and a science that should be studied and researched in depth. There are many blogs and websites that help beginners make sense out the complicated system, reading some of which will surely help. Trading in stocks on the stock market is typically driven by speculation, based on company news and performance factors. There are two ways to try and find the market value of a stock. Stock value is determined using some type of cash flow, sales or earnings analysis. This form of stock valuation is based on historic ratios and statistics and aims to assign market value to a stock based on measurable attributes. Most financial advisors will recommend against any attempts to time the market. It can't be done, they will tell you, and I agree. Timing the market or specifically identifying market tops or bottoms as opportunities to buy or sell is usually a futile effort. What financial advisors fail to tell you, however, is that market awareness is important and should be a factor in your investing decisions and strategies. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Visit: http://financial--advisor.com/services.aspx or click: Financial Advisor Services |