Timing the Market for investing will ensure making big returns? Correct or incorrect? explain. 

Timing the market for investing can be incorrect as it is not a sure way to ensure making big returns. Timing the market is an attempt to buy stocks at their lowest prices and sell them when they reach a certain level (Investopedia, 2020). This involves predicting future performance of the stock. As stock prices are unpredictable, this strategy has risks and there is no guarantee that one will make big returns by timing the market (Financiallitnow, 2017).

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).

On top of missing out on potential investment opportunities and potentially overestimating soon-to-come cheaper deals; another factor about timing the markets that makes it unreliable includes pricing discrepancies. This means how much one pays for something compared to its actual worth can vary greatly depending on when someone decides whether it’s a good deal or not. For instance if two people decide to purchase stocks from different companies but at different times then those who bought first could pay less than those who bought after because stocks tend fluctuate daily meaning you don’t always get “the best deal” . Thus resulting in some individuals getting more bang for their buck than others just based off luck rather than skillful decision making(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)