Tuesday, February 19, 2008

Timing the market

It is difficult to time the market. Will the market drop further? It is possible. But no one knows. If it does drop further, when is a good time to invest?

Some people advice that it is better to wait for the market to drop to the bottom and wait for the rebound. But it is still difficult to catch the right time, as the market may drop again after the rebound.

Other people advice that it is better to wait for 6 to 12 months to see wait until the credit crisis is over.

My personal view is:

1. It is difficult to time the market.
2. The stockmarket has corrected to an attractive value
3. It is all right for a long term investor to start investing
4. Due to the uncertainty, the investment can be made in tranches over the next six months

I am adopting the above approach for my personal investment (of which about 50% is still in cash).

Warren Buffet is making strategic purchases at this time, as they represent good value.

All the best for your investments.
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2 comments:

Anonymous said...

Time is to your advantage, timing is to your doom. Despite this adage,insurance agents are actively using and promoting timing on their clients. WHY?

February 19, 2008 11:03 AM
Anonymous said...

Timing is rampant among insurance salesmen. This is another loophole for churning. No wonder investment in the hands of these salesmen shrinks at each switching and churning.
CPF record shows losses till this day. Salesmen are not investment trained. They are trained to sell you on good news and get you to churn on rumours. The cycle repeats and the insurance salesmen's commissions repeat too. Beware of these snake oil salesmen.

February 20, 2008 11:35 AM

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