Market timing is the strategy of attempting to predict future market movements and make investment decisions based on those predictions. It involves attempting to identify trends or patterns in the market and then buying or selling securities based on the perceived likelihood that their prices will rise or fall.
Some investors use various techniques, such as technical analysis or fundamental analysis, to try to predict market movements. Others use more subjective methods, such as their own personal experience or intuition, to guide their decisions.
Market timing can be a risky strategy, as it involves trying to predict something that is inherently uncertain. There is no guarantee that market timing will be successful, and investors who rely on it may miss out on potential gains or suffer losses if their predictions turn out to be wrong. In general, it is generally considered to be more effective to adopt a long-term investment strategy and diversify one’s portfolio rather than attempting to time the market.