Investing term

What is Market timing?

Trying to buy near lows and sell near highs — which almost nobody does reliably.

Market timing is trying to buy near lows and sell near highs by predicting the market's short-term moves. It's seductive and almost impossible to do reliably — miss just a handful of the best days (which often cluster right after the worst) and your long-run return collapses. The consistent winners stay invested rather than dodging in and out.

For example

An investor who sells in fear and misses the market's ten best days over decades can end up with a fraction of what a steady buy-and-holder earns.

Market timing is taught hands-on in Stage 2 — Why Investing Matters (And When It Doesn't).

See the lesson →

Related terms

Asset classA broad category of investment with similar behavior. Stocks, bonds, cash, real estate, commodities.Behavior gapThe difference between a fund's reported return and what its investors actually earned — usually worse.Dollar-cost averagingInvesting a fixed amount on a fixed schedule, regardless of market level.FOMO buyingFear of missing out — piling into something after it has already run, because everyone else seems to be winning.
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