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All About Market Timing

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All About Market Timing

The Easy Way to Get Started


15 min read
10 take-aways
Audio & text

What's inside?

You can make money timing the stock market, but only if you are tactical and unemotional. Greed and fear kill fortunes.

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The preponderance of research for the past 100 years or so has demonstrated convincingly that stock markets are pretty efficient and that stock prices move randomly, or almost randomly. That is a strong argument against trying to time the market. Author Leslie N. Masonson disagrees, contending that if you use a few simple techniques to time the market, you can avoid losses and wind up with a more profitable portfolio than if you simply bought a representative selection of stocks and held them, as most financial advisors now recommend. He could have presented more evidence to support his opinion, but he is honest enough to contrast his point of view with the many arguments against attempting to time the market. He acknowledges that timing requires certain staunch character traits that are far from universally present in the investing populace. That is to his credit. Also to his credit, according to, is the fact that he usefully defines and discusses a number of trading techniques and information sources that even non-investors should know about and that investors should understand.


Bears Happen

Most investors lost huge sums of money when the technology stock bubble burst in 2000. Investors lost bundles in other market routs also - the 1987 crash, the collapse of the Go-Go ’60s market, the Great Crash of 1929, just to name a few. The usual advice to investors is to buy and hold, sweat through the downturns with fortitude and wait patiently for the rising market tide to lift all boats again.

Bear markets happen. They happen repeatedly and you can count on them. More than 12 bear markets came out of their dens during the last 50 years of the twentieth century. On average, each bear lasted more than a year and the market lost 30.9% of its value each time. After each bear, it took stocks almost two years to reach their previous highs. Bear markets cost real money. Older investors may not have time to wait for market recovery. Why should people endure losses when they could be pocketing profits? Market timers use specific strategies to decide when to buy and sell. The purpose of strategy is to remove emotions from the investing process. Emotional investing is for losers. Greed and fear kill fortunes.

The market timing strategy outlined here does...

About the Author

Leslie N. Masonson is president of Cash Management Resources, a financial consulting firm. A popular speaker, Masonson has written four books, including Day Trading On The Edge.

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