Buying Stocks? Learn the Art of Timing Stock Market Investments
A stock is simply a form of a person's ownership and claims in
an incorporated company. A person who owns stocks in a company
has a claim on its properties and profits. He also takes part in
decision making. As he buys more and more shares in that
particular company's stocks, his ownership stake increases and
becomes greater.
Timing stock market investments affects the value of the stocks
that are bought or sold in the market. Market timing affects the
profit returns of a buyer or a seller in the stock market. It is
also a method of strategic importance in the stock market.
Market timing is attributed to logic and can become an acquired
skill. It is a skill that can be an asset to a person who
participates in the market, whether as an investor, or as a
stock broker who knows how to play with stock market timing.
Market timing determines whether a stock seller or a buyer will
benefit monetarily or otherwise from his purchases or sales.
Most stock holders hold their stocks up and wait for the value
to increase. When the value of these stocks increase in the
market, this is the time when they plan to sell because it is at
this time that profits are projected to be high.
However, peaks and lows in the stock markets are unpredictable
and irrational. But this does not mean that timing stock market
investments is not good. It is not advisable to ignore the times
when there is significant undervaluation and overvaluation in
the stock market. This is the importance of timing stock market
investments. To buy stocks which are guaranteed to peak while
they are still selling low; and to sell high value stocks which
are expected to fall. If an investor ignores these important
market movements, then he is bound to lose instead of gaining
huge profits from overvaluation in the stock market.
Timing stock market investments can also be compared to stock
picking, and the two concepts can go hand in hand. Stock picking
is also an important skill and like market timing, one that can
be done using logic and reasoning.
If a stock market buyer or seller is an expert at timing stock
market investments and stock picking, he must focus on sourcing
stocks which are guaranteed to outperform. He must also find
corporations with competitive advantages, sustainable growth,
and important values for these companies are guaranteed to have
more stability and therefore, profit.