Timing Risk

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Dictionary Says

Definition of 'Timing Risk'

The risk that an investor takes when trying to buy or sell a stock based on future price predictions. Timing risk explains the potential for missing out on beneficial movements in price due to an error in timing. This could cause harm to the value of an investor's portfolio because of purchasing too high or selling too low.
Investopedia Says

Investopedia explains 'Timing Risk'

There is some debate as the feasibility of timing. Some say that it's impossible to consistently time the market; others say that market timing is the key to above average returns. A common thought on this subject is that it is better to have "time in the market," than trying to "time the market." This is evidenced by the growth of all financial markets over the long-run, and that many active managers fail to beat the market averages after transaction costs are counted in.

For example, if you take your money out of a stock because of a predicted downturn, you risk the chance of the stock increasing in price before you buy back in.
Search results for

'Timing Risk'

  • Choosing Between Dollar-Cost And Value Averaging

    http://www.investopedia.com/articles/stocks/07/DCAvsVA.asp
    ... the market all at once, you run the risk of buying at a peak, which can be unsettling
    if the prices fall after the investment, which is known as timing risk. ...

  • Series 7 Study Guide - Risk and Tax Considerations - Investment ...

    http://www.investopedia.com/exam-guide/series-7/investment-risk-tax-considerations/inflation-capital-interest-risk.asp
    ... assets. Timing Risk The uncertainty that the investor will have to sell the
    investment for less than anticipated due to market timing. ...

  • Series 7 Study Guide - Risk and Tax Considerations - Introduction ...

    http://www.investopedia.com/exam-guide/series-7/investment-risk-tax-considerations/default.asp
    ... Timing: applicable to most any investment, timing risk can occur upon purchase or
    sale. This type of risk speaks more broadly to valuation and risk management. ...

  • Market Timing Fails As A Money Maker

    http://www.investopedia.com/articles/trading/07/market_timing.asp
    ... your money actively is not the same as market timing. It is essential to ensure
    at all times that a portfolio has an appropriate level of risk for your ...

  • Can Regular Investors Beat The Market?

    http://www.investopedia.com/articles/trading/10/beat-the-market.asp
    ... Market Timing.) A Lost Cause? ... The best way for regular investors to achieve better
    risk-adjusted returns is by focusing not on out performance, says Tresidder ...

  • Series 7 Study Guide - Risk and Tax Considerations - Stock ...

    http://www.investopedia.com/exam-guide/series-7/investment-risk-tax-considerations/stock-classification.asp
    ... higher dividends to pay out - or miss - and are thus are sensitive to credit risk.
    In addition, defensive stocks are sensitive to capital, timing, and currency ...

  • Trading Is Timing

    http://www.investopedia.com/articles/trading/06/TradingisTiming.asp
    Trading Is Timing. ... Trading always comes down to timing. ... What makes trading such
    a difficult vocation is that timing is very hard to master. ...

  • Financial Funds Provide Diversity ... And Risk

    http://www.investopedia.com/articles/mutualfund/08/sector-fund-financial.asp
    ... in which to invest, and avoid some of the company-specific risk that comes with ... a
    portion of their portfolios should also be aware that timing specific sectors ...

  • Market-Based Asset Allocation Lowers Your Risk

    http://www.investopedia.com/articles/financial-theory/09/asset-allocation-market-conditions.asp
    ... How to Divide Markets into Risk Levels Firstly, it is important to understand that
    we are not talking about timing the market (mainly, though not only for ...

  • Getting Started In Stocks

    http://www.investopedia.com/articles/basics/07/getting-started-stocks.asp
    ... Being in the red that quickly wouldn't do much for your confidence. Plan to take
    several months to invest all of your money to minimize any market timing risk. ...

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