Market Timing

Market timing is the practice of buying or selling securities based on economic trends, corporate information, and market factors. Market timing is also defined as a process whereby an investor engages in trend-following strategies using technical analysis or quantitative modelling. Thus, investors might move assets into equities if they expect the markets to do well. Conversely, they would move out of markets if they expect a market decline.

The market timer seeks to sell at the “top” and buy at the “bottom.” Market timers are technical in that they look at things such as recurring patterns and other statistical anomalies that support their data and the price movement of a stock. They also key in on short-term price movements, which they believe are more predictable than ...