Having a discipline to time investments makes a great deal of sense, and there are several ways in which investors can exercise good timing. First, after having selected which stocks to purchase, an investor can determine how much to invest in these stocks now and how much to plan to buy later, recognizing that the market will fluctuate up and down on a constant basis over time.
Regarding timing, the time to be in the market is always. Those who think they can figure out the right time to enter and exit are doomed to failure. Even if they are correct once, they have to be right twice, and so on. One mistake in the process can ruin the entire chain of trades, and so some prudence is required. A so-called “collector” of stocks can offset the inevitable timing problems. This entails a predetermined strategy to buy either a fixed number of shares or a fixed dollar amount of stock periodically, regardless of price. This type of “dollar averaging” may not produce optimal results, but it assures that the investor will not buy all stocks at their temporary highs.
In summary, selecting stocks is not difficult if investors stay with quality. Emphasize holdings of stocks of companies which demonstrate above average growth of earnings potential as well as proven ability to produce such growth; exercise discipline in screening out stocks, utilizing leverage and timing purchases.