Is Market Timing a Smart Investment Strategy?

Submitted by Edward JonesPrint Story | Email Story

You may have heard that timing is everything. And in many walks of life, that may be true – but not necessarily when it comes to investing.

To understand why this is so, let's look at three common mistakes investors make:

* Selling investments and moving to cash when stocks are predicted to drop: If you follow the financial news on cable TV or the internet, you're eventually bound to discover some "experts" who are predicting imminent, huge drops in the stock market. And on rare occasions, they may be right – but often they're not. And if you were to sell some of your stocks or stock-based investments based on a prediction and move the money to cash or a cash equivalent, you could miss out on possible future growth opportunities if the predictor was wrong. And the investments you sold still could have played a valuable part in your portfolio balance.
* Selling underperforming assets in favor of strong performers: As an investor, it can be tempting to unload an investment for one of those "hot" ones you read about that may have topped one list or another. Yet there's no guarantee that investment will stay on top the next year, or even perform particularly well. Conversely, your own underperformers of today could be next year's leaders.

* Waiting for today's risk or uncertainty to disappear before investing: Investing always involves risk and uncertainty. Instead of waiting for the perfect time to invest, you're better off building a portfolio based on your goals, risk tolerance and time horizon.

All these mistakes are examples of a risky investment strategy: trying to "time" the market. If you try to be a market timer, not only will you end up questioning your buy/sell decisions, but you also might lose sight of why you bought certain investments in the first place. Specifically, you might own stocks or mutual funds because they are appropriate for your portfolio and your risk tolerance, and they can help you make progress toward your long-term financial goals. And these attributes don't automatically disappear when the value of these stocks or funds has dropped, so you could end up selling investments that could still be doing you some good many years into the future.

While trying to time the market is a difficult investment strategy even for the professionals, it doesn't mean you can never take advantage of falling prices. In fact, you can use periodic dips in the market to buy quality assets at more attractive prices. Suppose, for example, that you invested the same amount of money every month into the same investments. One month, your money could buy more shares when the price of the investment is down – meaning you're automatically a savvy enough investor to take advantage of price drops. While your money will buy fewer shares when the price of the investment is up, your overall investment holdings will benefit from the increase in price.

Buying low and selling high sounds like a thrilling way to invest. But in the long run, you're better off by following a consistent investment strategy and taking a long-term perspective. It's time in the market, rather than timing the mark

This article was written by Edward Jones for use by your local Edward Jones financial advisor. Courtesy of Rob Adams, 71 Main Street, North Adams, MA 01247, 413-664-9253.. Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation. For more information, see

0 Comments welcomes critical, respectful dialogue; please keep comments focused on the issues and not on personalities. Profanity, obscenity, racist language and harassment are not allowed. iBerkshires reserves the right to ban commenters or remove commenting on any article at any time. Concerns may be sent to

Berkshire Food Project Recognizes Hours Put in by Volunteers

By Tammy DanielsiBerkshires Staff

Three generations of volunteers with Linda Palumbo, left, Cindy Bolte, Alicia Rondeau and Cassandra Shoestack.
NORTH ADAMS, Mass. — Five days a week a troop volunteers helps the small staff of the Berkshire Food Project feed hundreds of people. 
On Monday night, the tables were turned. 
More than 30 volunteers and attending family members were served up a choice of beef wellington and potato, salmon and rice, or a vegetarian meal, along with appetizers, dessert and beverages.
"Just from 2018 to 2019, [we served] 10,000 more meals, right, a 28 percent increase in 2019. So the numbers on the stove, same amount of counterspace. The only thing that changed is the capacity of our volunteers. So thank you, guys," said Executive Director Kim McMann. 
View Full Story

More North Adams Stories