Posted: March 12th, 2023
The primary risk associated with timing the market is that one may miss out on good investment opportunities due to trying to time the markets. For example, if an investor tries to wait until they feel like they can find a great deal or predict when a price will drop; there might be other investments in which one could participate in during that time period that would have been successful without having made any predictions before hand (Financiallitnow, 2017). Furthermore, because stock prices are unpredictable over short periods of time, even well-informed investors who try to accurately time the markets may end up making mistakes or miscalculations in their assessments (Investopedia 2020). Additionally if someone tries to wait too long for what they anticipate as being ‘the best deal’ then all sorts of events such as wars and recessions can occur and cause major losses in money invested (Debt Relief Hub, 2019).
In conclusion it appears attempting to accurately time the markets does not guarantee success nor guarantees long term gains due its volatile nature. Although some investors may benefit from successfully predicting future trends associated with certain investments studies show most fail at this task.(Financiallitnow ,2017)
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