Stock Trading in Canada – Timing the Market

Market timing is always a tricky issue. Most people on Bay Street will tell you that timing the market is a fool’s errand.

To a large extent they are correct. Markets – especially those turbulent ones such as we experienced in 2009 – are very difficult to time. Stock values change based on the economy, inflation, jobs, the growth prospects of a company, and other macroeconomic factors that can be called outside influences. Stocks can go up and down in value daily, weekly, or monthly.  And one of the biggest problems with trying to time the market is the time involved in doing it. Do you really have several hours a day to try to stay on top of everything?

Probably not. So what can you do?

As Jim Cramer often  says, “There’s always a bull market somewhere”. And more importantly, the market does not need to go up for an investor like you to make money.

As investors, we’re programmed to think in terms of “buy low,  sell high”, but what many investment advisors don’t tell their clients is that it’s equally possible to “sell high and buy low” when stock markets are in a decline.

Something else worth knowing is that there are also strategies you can use to make money when the markets are flat. In sum: you should not be afraid of whether or not to invest now but concentrate on howyou are investing.

One more tip: it is always prudent to average into your investments

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