They don't want to have to explain timing to their colleagues, peers and clients, especially when those systems require managers to be on the sidelines during any part of a market rally. If you are a traditional investment manager you can stand by and watch your clients lose 30 percent of their money, then explain that it happened to everybody. Chances are your clients will stick with you. In this business, mistakes are guaranteed. Market timing requires making a lot of moves in and out, and some of those moves will turn out to be wrong.
Many people have an awful time dealing with their mistakes.
History tells us one of every three trades will lose money, and half the time investors will buy back into the market at a higher price than they last sold. Most people simply don't have the psychological fortitude to stick with such a system. Two losing trades in a row, even if the losses are small, will turn many people away from market timing permanently. Yes, market timing is a real risk to fragile psyches, big egos and investors who can't stick to a discipline. But as we have pointed out repeatedly in these pages, backed with ample data, when market timing is followed as a discipline, it does not put investment dollars at added risk.