Question

We have seen that market timing has tremendous potential value. Would it therefore be wise to shift resources to timing at the expense of security selection?

Answer 1

Answer:

NO it won't be wise to do that

Explanation:

It is best to shift resources timing due to macro economic market factors because these factors affect market timing greatly and these factors help to determine the future market prices movements.

Market timing is a trading strategy used in the trading/purchase of financial assets like stocks and foreign currencies in the financial market in the bid of making profits from the purchase. it also also unwise to shift resources to market timing at the expense of security selection no matter how good the market timing is.

Answer 2

Answer: No

Explanation:

It is not a necessarily a good decision to shift resources timing at the expense of security selection because there's a tremendous potential value in security analysis. The decision to shift has to be made on a macro basis as opposed to the micro based forecasting ability of the portfolio management team. As market timing is greatly affected by macro economic factors that has a very significant bearing on its movement.

Security selection is the process of recognizing individual securities within a specific portfolio.