Waiting for bottom. (Investments & Finance).

WHEN I asked an investor friend recently for his mar et outlook, I got a dispiriting answer. "We won't see a market bottom until nobody cares any more," he said.

Light-hearted comment, heavy message. Right now plenty of investors, including me, still care. Since the bottom we're looking for must come by definition at the point of maximum discouragement, it figures that many of us are going to have to give up before a bottom can happen. We're obstructing our own path.

Fortunately, people like us can hope to succeed in investing without possessing the ability to call market bottoms--or tops, for that matter. In the famous words attributed to J.P. Morgan, "I never buy at the bottom and I always self too soon." So maybe we needn't bother trying to get our timing just right.

Sages say it over and over: "It's time in the markets, not timing." What gets less attention is why this should be true. The reasons are especially worth thinking about nowadays, when a relentless decline in stock prices has many people poor-mouthing the only practical alternative to market-timing, commonly known as buy-and-hold.

Unlike buy-and-hold, which can produce a great majority of winners in an economy that grows over time, timing any market is a negative-sum game. Among all timing decisions made by every participant in the market, only halt can be correct. Factor in costs such as commissions (not to mention taxes), and the majority is bound to lose.

There is a vast amount of information, ideas and possibilities to be searched through the microeconomic world populated by all individual securities. Market-timing, by contrast, is more a matter of macro, or big-picture, calculations--what will interest rates do next, who's going to get elected to which office, how will the aging of the population affect economic growth?

Trouble is, these are thoroughly examined every hour of every day by hordes of analysts and investors. As the number of people asking a market-related question increases, my chances of gaining an edge decrease.

The temptation to time the markets doesn't go away. It's a natural impulse. If I've sworn off everything that goes by the name of "market timing," I can still try to sneak by doing something very similar with a different label. The next time I shift some of my savings from, say, money-market funds into stock funds, I can tell myself I'm not timing the markets, I'm just engaged in "tactical asset allocation."

Or I can drop any pretense of sophistication and just chase what looks hot. Many mutual fund managers saw the lay of the land years ago. They perceived that they had a better chance of success if they stuck to picking stocks, staying "fully invested" at all times and leaving the question of asset allocation to their investors,

"The individual investor took back the asset-allocation decision, and over-allocated into stocks," says Jack Rivkin, head of research and trading at Neuberger Berman Inc. "My guess is at the bottom of the market--and I don't know when that bottom will be--they'll be under-allocated in stocks."