Market Timing Law and Legal Definition

Market timing is the act of attempting to predict or forecast the future direction of the market, typically through the use of technical indicators or economic data. This is possible through the practice of switching among mutual fund asset classes in an attempt to profit from the changes in their market outlook. The prediction may be based on an outlook of market or economic conditions resulting from technical or fundamental analysis. This is an investment strategy based on the outlook for an aggregate market, rather than for a particular financial asset.

According to some investors, especially academics, believe it is impossible to time the market. However, other investors, notably active traders, believe strongly in market timing. In short it is very difficult to be successful at market timing continuously over the long-run.