Category: Investing

Is It Indeed Possible To Know Market Timing?

Is It Indeed Possible To Know Market Timing? We might know the concept of market timing search process carried out by the traders or investors for the best timing to enter and exit the market, whether it is the stock market, bonds or currencies or futures.

Talking on the concept of market timing, which means essayed market participants from Step 2 Wealth System traders and investors know the right time to enter and exit from the market and not the working hours of the markets. Investors have repeatedly since the creation of the various financial markets to try to predict future trends of financial assets to search for the best times to enter and exit from the market in order to achieve the greatest possible return.

Market Timing

Market Timing

Therefore these individuals have developed multiple methods and theories in an attempt to anticipate price trends. It is still currently the concept of market timing is known as a continuing debate between the parties that support this concept and the parties who claim that market timing irrelevant in Step 2 Wealth Scam investment and trade. In this article we will talk about the concept of market timing does actually can be used to predict the prices of assets in the various financial markets
What is market timing?
We might know the concept of market timing search process carried out by the traders or investors for the best timing to enter and exit the market, whether it is the stock market, bonds or currencies or futures. Through the study of the technical data and historical price of the asset or through a macro-economic data, and to try to predict the future direction of this asset.

And usually does these traders to trade or invest in the short or medium term. It aims traders through the process to reduce their exposure to risk by trying to purchase at the lowest price possible and sell at the highest possible level, and vice versa in the case of entering into a short sale. These traders is not based on the underlying data is usually an asset, but an attempt to take advantage of the fluctuations that occur only in the short term.
Is market timing actually possible?
According to many investors, the market timing is impossible, and most of these investors are investors who are carrying out investment in the long term and who are called Bmsttmra “Buy and wait” (buy-and-hold investors), they rely mainly on fundamental analysis in making their decisions. And they support their opinion the theory of market efficiency, which states that an asset’s market price reflects most of the available information on the origin and therefore impossible to predict the direction of prices in the short term. Warren Buffett, the third is the richest man in the world and the most successful investor ever, one of the most supportive of the idea that the possibility of market timing is impossible. It is always advisable to look for companies that priced its shares to be undervalued and do purchase it because the price will rise over time.

Critics and supports the concept of market timing on the study of financial figures of the company Kalaaradat, market share, and net profits, financial indicators, because it is impossible to predict the direction of the market in the short term, because the markets in the short term is impossible to know the vagaries of unpredictable. Also, a study conducted by “Dalbar” an economic and financial research companies, and carried through which analyzed the performance of the two samples of the investors in the stock markets in the United States for 20 years, and the result was that investors who rely on market timing their performance was less than investors who buy and wait by 4.66%. Because the first category attempts to search for the best timing for the market were not successful.
So market timing just messes?
The answer is simply not in spite of the above, and the evidence on this is that there are many individual traders and institutions that have achieved great success by relying on Zman market trading in the short term, the best example of the famous “Renaissance Technologies” US hedge fund, which manages a total of 65 billion dollars of capital, and this is a hedge fund based on trading strategies ranging from fractions of a second (the so-called high-frequency trading) to a few days. This is the company of the most successful hedge funds at all / It is the year 2001 to the borders of 2013 was the worst annual return made by the company is 21%.

Nevertheless, market timing is very difficult, because the statistics indicate that most individuals traders who rely on market timing lose their money quickly. It may require a lot of effort and time to become a trader can rely on market timing and trying to figure out the best times to enter and exit. Due to volatile markets dramatically and can not predict future trends. And so that you can skip Market Timing, you must find or invent a strategy will provide you a statistical exploited for profit, meaning that total profits are always higher than the confirmed losses group, but did it feature you should do an experiment of this strategy on historical data to make sure of their ability to achieve positive results.

Diversify The Investment Portfolio And Domestic Financial Market

Diversify The Investment Portfolio And Domestic Financial Market; Diversify the investment portfolio investment strategy aims to reduce risk by combining a variety of investments, such as stocks, bonds, real estate and other asset classes, as well as geographical diversification of investment. And requires good management of the investment portfolio of the risks of Guaranteed Money System Scam investing in the assets and avoid measuring the direction of price movement in the assets of the portfolio was negative in the same direction accuracy.

And diversification of the investment portfolio is happening at two levels: the first asset allocation, and at this level is the distribution of the funds invested on a number of major asset classes (stocks, bonds, etc.).

Investing

Investing

The second investment distribution of the different investment options within a particular asset class, such as the distribution of the shares allocated to the various sectors of the investment. The aim of this diversification is to reduce risk in the investment portfolio. It is often volatility in the value of the portfolio is limited due to the lack of the possibility that all asset classes, or the performance of companies in different industrial sectors in the value price is moving at the same time or the same rate. And reduces the diversification of the pace of all of the ups and potential landing and allows more performance in line with the different situations of economic conditions, and may help diversify investors to balance and diversify the risk in their portfolios process, and can diversify the investment also includes a time scale of investments, which is supposed to conform with the investor’s objectives and the need for liquidity, such as short-term investments, medium-term and long-term.

But the global financial crisis showed that the diversification of investment portfolios had a limited impact, as any investor (individuals or institutional investors) investment type to include categories of assets investment variety, or invested in mutual funds, have suffered financial assets invested in the same drop any indication speed of the shares, contrary to what was many wealth management and investment managers believe that the investment categories were not much related to each other, and that investing in a diversified investment categories will reduce the risks. But, it may be appropriate to say that what happened was not able to diversify investments in the portfolio of investment protection can be interpreted that the global financial crisis, described as the worst crisis since World War II, has been long negative impact all economies and global financial markets, and greatly influenced the low investor confidence.

As for investment diversification of investment portfolios and the availability of investment tools and models required in our local market, despite the availability of some of those tools, but they are not commensurate with the size of the economy and financial market of the kingdom, where he represented in 2008 the Saudi economy of 17 per cent of the economic size of the area Middle East, and accounted for 43.7 per cent of the economic size of the Gulf cooperation Council (GCC). As for the size of the financial market represents 34 per cent of the size of the financial market for the Middle East, and accounted for 44.9 per cent of the GCC financial market size.

And thus may be useful to some vital additions made in the construction of the financial market framework commensurate with the size of the local economy and its position in the map of the economies of emerging countries, and provide a variety of investment options for domestic investor allows the possibility of building a diversified investment portfolio includes all investment asset classes, and most important: First, the availability of investment channels investment offers in different asset classes, because the investment opportunities for domestic investors with weak investment channels, and the limited opportunities for diversification in the portfolio investment to the investor in the investment asset classes, and the high cost associated willing to diversify their investment portfolio to invest in different asset classes. for example, despite there are some real estate investment trusts, but they often may target a certain segment of investors by setting the minimum subscription, and all real estate investment trusts available do not provide investment real estate a long-term oriented to own real estate assets could during which the investor to benefit from growth in the real estate asset values ​​over time with getting a regular income returns, in addition to that there is a real estate investment fund or non-real estate investment available through the trading units.

Second: The availability of the option of investing in government bonds, companies of all categories of investors (institutions / individuals) of strategic importance, an important part of the diversification of the investment portfolio choices, and therefore perhaps the presence of the depth of highly liquid government bonds and corporate market, and the existence of versions of government bonds for periods of different maturities, and the development of standard Reference interest rate Benchmark, as a tool to measure the financial return and the amount of risk than investing in bonds, yield curve yield curve represents the most important foundations of the financial market building.

Third, the financial market need to be some important instruments such as short-selling, and trading option contracts Options for the shares, and other tools, and so for its those tools of possibility and guarantees for money investor insurance, and create a balance and another dimension to the market. As well as the inclusion of some of the indicators for circulation to enable the investor to invest in them instead of several companies. And the availability of dual-listing of some companies from the regional markets. For example, the inclusion of CFD Society Scam companies or regional trading in the local market allows the investor the possibility of diversifying the investment portfolio at a lower cost with no exposure to the issue of the cost of changing the currency.

Conclusion:

Although some believe that the diversification of the portfolio investment can be deducted seeking to obtain maximum returns of those who favored a high degree of risk, because it is mostly the investments allocated to different sectors and classes with different performance of assets, and therefore affects With different performance, and thus affect the overall performance of the investment portfolio, so I believe that diversification friend to those who wish to preserve the wealth with achieving some of the returns may not be high. Thus, it is likely that the global financial crisis, and losses resulting from fear and instability of financial markets means that many investors are looking to wealth preservation rather than maximizing revenue. The investment diversification helps to meet these goals, and perhaps the decline in investor confidence in financial markets supports the return of this kind of investment styles.