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Chapter 7. Timing the Market > Individual Investors and Market Timing

Individual Investors and Market Timing

The previous sections of this chapter have shown that professional investors have difficulty in trying to time the market. Consider that these professionals have a high degree of formal education in investments, they have access to the best sources of information and technology, and they have a lot of time (this is their job after all) to use these advantages to make timing decisions. Yet, successful market timing seems to elude them. How, then, is the individual with less formal training, less access to information, and less time to make decisions supposed to be successful in timing the market?

The odds are definitely against timing success by the individual investor. Yet, this does not seem to deter people from trying. People are frequently optimistic (see Chapter 4, “Mood, Optimism, and Investing”) about their own chances for success, even when the odds are against them. These optimists must learn the hard way that market timing is folly. That is, they must try and fail themselves in order to learn the lesson.


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