Investors can indulge in an emotional high that makes stock ownership great fun. Cousins Even when things go bad, when competitors steal market share, the new product fizzles, management proves to be incompetent and analysts move on to greener pastures, there is still that story. If it was once true, maybe it could be true again. There's always room for more hope. And even when timing works just the way it's supposed to and shelters investors from the storm of a bear market, even that is an emotional challenge.
Some investors are quite comfortable on the sidelines, knowing they have no downside risk.
But others are anxious, knowing they'll never make any significant money in a money market fund. At its core, investing is the process of making financial bets on the future. And because the future is uncertain, there's really no way to avoid hope. Investors who do not use market timing have to hope the market won't lose 500 points in a day, as it did in October 1987. Those who do use market timing have to hope their timing system or systems will get them on the sidelines ahead of time if such a drop occurs.