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When it comes to the stock market, timing is everything. But, you can’t always time your actions right without enough data or knowing what to look for. After all, you could do everything correctly and sometimes a big sell off or wave of interest can throw off market pricing. However, with the proper experience, many investors have come to rely on market timing signals that allow them to either buy, sell or hold stocks. Working with high stock price companies and low price ones, they are able to make a profit by timing their trades to optimize when to execute on a given signal.
Market Timing Tools
Undoubtedly, there are many stock market tools, software and analysis programs available. There are several companies that provide informational services for both large and small investors. Furthermore, there are so-called gurus who sell training courses to get you to “make money” buying and selling stocks.
Time Frame Matters
The time frame for investment matters when it comes to using market timing strategies. If you are investing long term, it may not be wise to try using these tactics regardless of whether you invest in an oil business or Forex. You will probably only be executing one or two trades a year, which could make market timing tactics useless. If you are executing trades each day, on the other hand, this could be a wise market strategy to consider. Determine your time frame to figure out whether market timing investment strategies are the best option for you.
Keeping Things Simple
Sometimes, keeping things as simple as possible is for the best. For example, if you have just a few market timing signals to watch, that are consistently useful and can be measured over the long run, you might not need all the extra fluff. So, what market signals can you watch out for free? Here they are in plain old black and white:
- Seasons
- Fiscal year end
- Calendar months / quarters
All these are signals when the market will change. You don’t need anything sophisticated to tell you that. Even with the latest daily stock tips, volatility charts and market trends analysis, those signals will be reoccurring regardless. Next, it is up to you to figure out how you will react to your given market signal. You can apply them to the tech sector with Intuit stock or another one of your choice.
Market Signal Focus
Keep in mind, many traders and investors are experienced in either one or a few market signals. For example, there are experts who focus just on seasonality or seasonal indicators for a certain stock or sector. Additionally, there are others who focus on riskier trends like product launch dates or sales cycles.
Risk Tolerance
Depending on your taste for risk, you will want to adjust your investments accordingly just as Tweedy Browne funds. Certainly, a fair share of risk comes along with market timing. However, you can work to limit that risk by choosing your signals and stock picks carefully.
On The Other Hand…
There are many finance experts who would disagree with market timing strategies. Instead, these individuals tout a different technique. This practice can be summed up in a sentence. It is not about marketing timing, it is about time in market. If you currently use stock market software, you will notice that it probably requires information regarding the expected date for buying out. Any stock trading newsletter you subscribe to probably mentions duration in the market almost every issue, as well. In order to have success in stock picking, you need to know how long you will be in the market. If you do know how long you expect to keep your money invested, the market timing signals may not be as important.
No matter what investment strategy you subscribe to, or whether you use offshore investment or wall street investments, conducting research, like reading this article, will only help to make you a more informed, and therefore better, investor. Consider these two investing strategies before deciding which is right for you.
Image from http://www.dailyreckoning.com.au/key-market-signal-shows-stock-collapse-has-only-just-begun/2015/08/24/
