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The importance of timing in the stock market

by Effie Moore Salem

Created on: February 15, 2010   Last Updated: March 19, 2011

Timing is everything in the stock market, yet it takes a seasoned investor to know when to buy and when to sell.  Knowing and understanding that, however, makes it no easier to buy and sell stocks, bonds, and other securities. Each investment has its own best time to get involved, yet how can one know exactly when that is? There are no hard and fast rules, only assumptions and lots and lots of advice and pseudo-scientific information.

Timing is everything in the stock market, yet it takes a seasoned investor to know when to buy and when to sell.  Knowing and understanding that, however, makes it no easier to buy and sell stocks, bonds, and other securities. Each investment has its own best time to get involved, yet how can one know exactly when that is? There are no hard and fast rules, only assumptions and lots and lots of advice and pseudo-scientific information.

The best time  to buy a stock is dependent upon the buyer. If the stock is worthy,  that meaning it will will be around in spite of its fluctuating prices. That, of course, has more to do with the general overall economy that its integrity - a buyer with money to afford it, can buy at any time. Others with less money to spare probably can only afford to buy when the price is low. Money will be made if sold when the price goes up. Yet, good substantial stocks are valuable assets and often pay good dividends over the long haul.

For newer stocks, meaning those who have not been around long enough to prove their worth, time will be needed to see how solid they are. If these are speculative stocks - maybe they will catch on and become more valuable with time, or maybe they won't, timing here is everything. The unsure, anxious ridden investor will be better off waiting until a certain stock becomes an item the public is demanding, instead of buying it.

Stocks are more of a risk than the steadier bonds but their possibilities for gain and making money faster is greater, and this makes them more interesting, and more exciting, and yes, more of a gamble. Timing here is important. The idea is to buy when low and sell when high. But much can go wrong.

 What if this is a drug company that rose from the shadows with a new miracle drug and the stocks have grown like spring corn? That is good if it happens to be true, but what if it is only in the testing stages and nothing conclusive has been reached? It is then considered iffy, at best. If proven false, the prices plummets and the stock becomes

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