Market Timing
Market timing is the investment strategy of attempting to buy stocks or funds at a low and selling them at a high. Timing buys and sells always seems so obvious in hindsight. Keep in mind that if any investor knew just when to buy or sell, they would acquire a large proportion of all the money in the world, and nobody ever does that. However, investors can greatly improve their market timing by avoiding these two temptations, which are essentially mirror-images of each other:
1. Avoid the lure of plunging into a risky stock or investment situation, even if it seems to offer a great profit opportunity.
2. Resist the urge to dump a high-quality investment just because it looks like it may get dragged down by a falling market.
From time to time, we look at the negative side of investing, on the theory that successful investors learn from mistakes. If you’re more aware of critical errors, you may be able to avoid them altogether or at least cut your losses. Today we examine three common mistakes that most investors will fall into at some time.
- Error #1:
You might call it fair-weather investing. Many investors prefer to buy stocks only when economic and financial conditions seem good, if not ideal. When there’s news of rising oil prices or interest rates, for instance, they are inclined to stay out of the market, or get out if they’re already in.
Yet when they think conditions are ripe, these “fair-weather” investors …read more »
Over the years, we’ve met a number of investors who favour a stock market strategy of buying stocks only when economic and financial conditions seem good, if not ideal. If these investors hear talk of rising oil prices or interest rates, for example, they are inclined to stay out of the market, or get out if they’re in.
In contrast, when …read more »
Exchange Traded Funds, or ETFs, don’t load you up with heavy management fees, nor do they tie you down with heavy redemption charges if you decide to get out before six years have passed. Instead, they give you a lower-cost and more flexible and convenient alternative to mutual funds.
The problem is that ETFs are just as helpful for facilitating smart …read more »
Asset allocation funds are mutual funds that distribute their assets in accordance with all investors’ goals (consistent returns, diversified investments, etc.). Unlike balanced funds, they can shift their portfolio allocations between stocks, bonds and cash in order to capitalize on perceived investment opportunities in any one of those classes.
If a fund’s name includes the term “asset allocation,” it means …read more »
Our three-part investment approach focuses on where you should put your money. Our advice is to invest mainly in well-established companies, spread your money across the five main economic sectors and downplay investments in the broker/media limelight.
Investing this way takes a lot of the risk out of the more difficult question of when to buy and sell.
Still, it’s a …read more »
HARBOUR FUND $21.52 (CWA Rating: Conservative) (C.I. Mutual Funds, 151 Yonge St., 7th Floor, Toronto, ON M5C 2W7. 1-800-268-9374; Web site: www.cifunds.com. Load fund — available from brokers) invests in only 25 to 40 high-quality mostly Canadian stocks, and it may hold stocks for four or five years to realize their value.
The $5.7 billion Harbour Fund’s top holdings include Bank …read more »
HARBOUR FUND $21.66 (CWA Rating: Conservative)(C.I. Mutual Funds, 151 Yonge St., 7th Floor, Toronto, ON M5C 2W7. 1-800-268-9374; Web site: www.cifunds.com. Load fund — available from brokers) invests in only 25 to 40 high-quality mostly Canadian stocks, and it may hold stocks for four or five years to realize their value.
The $5.2 billion Harbour Fund’s top holdings include Royal Bank, …read more »
UNIVERSAL CANADIAN GROWTH FUND $20.93 (CWA Rating: Conservative) (Mackenzie Financial Corp., 150 Bloor St. West, Toronto, Ont. M5S 3B5. Web site: www.mackenziefinancial.com. 1-800-387-0780; Load fund — available from brokers) holds companies with strong management and sound business prospects. The fund holds fewer than 40 stocks at all times.
Top holdings include TD Bank, Kinross Gold, Edwards Lifesciences, John Wiley & Sons, …read more »
HARBOUR FUND $22.47 (CWA Rating: Conservative)(C.I. Mutual Funds, 151 Yonge St., 7th Floor, Toronto, ON M5C 2W7. 1-800-268-9374; Web site: www.cifunds.com. Load fund — available from brokers) invests in only 25 to 40 high-quality Canadian stocks, and it may hold stocks for four or five years to realize their value.
The $5.3 billion Harbour Fund’s top holdings include Royal Bank, CN …read more »
