4 Market Timing Keys to Help You Predict the Market's Next Wild Move
By John Persinos
During holiday-shortened weeks such as this one, trading volume slows as investors hit the beach. Most of us (including me) are packing the coolers, chaise lounge chairs, and kids into the car.
Now's an opportune time to step back and examine a few investment truisms.
The great traders such as Warren Buffett govern their buying-and-selling activity through patience and the dispassionate application of value criteria, but they also observe crucial signs when the market is about to rise or fall.
"Timing the market" refers to trying to predict the best times to buy and sell stocks to maximize profits. This strategy often involves making decisions based on short-term price movements and market trends. Trying to time the market is widely considered to be a fool's errand.
However, while I generally discourage investors from trying to time the market, making informed, proactive decisions based on expected price fluctuations is a more sensible strategy.
In today's especially risky investment climate, you can stay a step ahead of the game by learning these proven market-timing indicators. They'll help you ride the bull, and beat the bear:
- Buy when the stock market is showing the classic signs of bottoming out (and sell when the market is at a top).
Seems simple, right? Buy low, sell high. It's anything but, but here's a good rule of thumb for identifying the market's extreme peaks and valleys: Look for extreme behavior.
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