Market timing is the act of moving investment money into or out of the financial market - or switching funds between asset classes - based on predictive methods.
If investors can predict when the market will go up and down, they can enter into trades to turn this market movement into profit.
Market timing is the opposite of a “buy and hold” strategy where investors buy securities and hold them for an extended period, regardless of market volatility.
While traders, portfolio managers and other financial professionals are quite feasible, the average investor may find it difficult to time to enter the market.
For the average investor who doesn’t have the time or inclination to follow the market daily, and in some cases hourly, there are good reasons to avoid timing the market and focus on long-term investments.
A floating rate fund is a fund that invests in financial instruments with variable or floating interest rates. A floating rate fund invests in bonds and debt instruments, the interest payments on which fluctuate depending on the level of the base interest rate.
Go-go fund - a mutual fund with an investment strategy focused on growth stocks and other high-risk securities.
These funds were at their peak in the 1960s, attracting investors with the promise of unusually high market returns.
A Growth and Income Fund is a mutual fund or ETF strategy that seeks to generate a total return for investors, including capital gains and current income.
Lifecycle funds are asset allocation funds in which the share of each asset class automatically adjusts to reduce risk as the desired retirement date approaches.
Market neutral refers to a type of investment strategy used by investment managers who seek to profit from both rising and falling prices in financial markets.