Market timing is essentially the opposite of buying and holding. Market timers believe that it is possible to predict when the market, or certain stocks, will rise and fall. It therefore makes sense to buy when the markets are low and so sell when they are high in order to maximize profits. Marketers can use any number of different methods for timing the market-technical analysis, fundamental analysis, market rumors or even intuition. Most experts agree that market timing is incredibly difficult if not downright impossible. They also warn against it, because it is hard to sale when the market or particular stock is high or low. Often a seemingly low stock will go lower. Moreover, commission eat away at your profits when you trade frequently, especially on small transactions. In the long run, the market goes up. Unless you are a superb timer, you will do better staying fully invested at all times.
