Timing recovery in the market

Hey,

I am not looking for a crystal ball. That is, I am not looking to ask when the market will recover.

I am more interested in what signs do experienced investors look for when trying to determine when to get back in to the market after a bit of turmoil like we are seeing now?

thanks.

This is a really difficult one, I am sure that whatever is said, there will be others who do not agree with it.
Having managed to work the stockmarket reasonably well for the last while I suggest the following : It is probably best to wait for a period of stability or rise in the market. This should be for at least a period of four weeks. The general rule is that only very few will catch the early rise in the market i.e the first 20 per cent increase. When stability and slow rise continues then get back in. Of course you could buy blue chip now and be prepared to wait. In general these shares won't let you down over a period of five years.
Again I stress this is merely my opinion snd experience, I would welcome others experiences and opinions more than comments.

Read Taming the Lion by Richard Farleigh (dragon's den). He only buys in a rising market and doesn't sell until the market is going down. This way he never sells at the top price and never buys at the lowest price but reduces risk.

The book is worth reading.

The vast majority of academic research suggests that it is impossible to time the markets. If a market appears to be good value to you, buy it. It may go down again before it goes up. That's the way markets work.

Brendan

doberden said:

He only buys in a rising market and doesn't sell until the market is going down.

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whats the definition of a rising or falling market ? it seems to me that by the time you find out the horse has probably bolted

doberden said:

He only buys in a rising market and doesn't sell until the market is going down.

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Is that not the same as buying at the bottom and selling at the bottom, or buying at the top and selling at the top. Maybe not.

theres no easy way to do this,if your going to invest then it has to be for the long term,but as a guide watch the professonals,if you have access to one of the internet share trading companies you can check the the volumes,and when theres large volumes then the fund managers are buying and if this continues for say 2 weeks,then i would sugest where in a recovery period.ok so you didn't get in at the bottom and shares are now 12--15% more expensive ,youv'e a better chance of being in recovery.

Some shares will do well, regardless. Finding out which companies have a good future, and are well established are always going to be ok in long-run(5 + years to hold them).
Buying shares to make a quick money maker is harder,and dodgier.
Timing is all dependent also. I watched rio tinto shares grow like mad for weeks- then bought some. Next thing is they went up 25% in one day. So my timing was right.??

whats the definition of a rising or falling market ? it seems to me that by the time you find out the horse has probably bolted

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IF you take rising market to mean uptrend then it would be a series of higher highs and higher lows on the chart. The opposite for falling market.
When investors take profits at different stages of the uptrend this gives others an opportunity to get in on the so-called pullback.

yob said:

...as a guide watch the professonals...

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Be care of which professionals you watch.

Just two weeks a big name Irish stockbroking firm was advising investors that the worst was over. Then there was more losses last week.

Similarly, one month ago another high-profile Irish stockbroking firm sent out signals that there were bargains to be had. Instead there were losses.

The Irish Stock Exchange has lost 30% of its value since July.

Makes you wonder if property is a better investment at present: ISE down 30% in 4 months, property down about 3%.

Gautama said:

Be care of which professionals you watch.

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i was talking about fund managers who are actually trading,not stock brokers who are payed a commision on each transaction you may or may not make,stock brokers have been advising buy since the start of this crises,and if you look at the fundementals of the large firms on the ISE there are bargains,but that doesn't seem to matter anymore,this isn't about bargain hunting its about the markets settling down and fund managers gaining confidence to start buying equity again,but thats not going to happen today or tomorrow.
dont know about you but in my area you couldn't give property away at the moment.for the moment cash is king!!