Market Timing is an investment strategy where an investor buys or sells an asset based on a predictive assessment of that asset’s price movement. Market Timing often involves Technical Analysis.
Downsides – extra transaction costs & short-term capital gains
Opposite of Buy-and-Hold
Used in Tactical Asset Allocation
Not exactly opposite of Passive Investing because an investor can “market time” index funds, especially sector-specific funds
Not exactly the same as Active Investing because an investor can “buy-and-hold” specifically selected assets
Warren Buffett's Take
“Be fearful when others are greedy, and be greedy when others are fearful.”
“Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”
