Can You Time the Market?

Making money by darting in and out of stocks is easier said than done.

After watching 70% of his retirement savings evaporate in the 2000-02 bear market, Bob Parrish was determined not to leave what was left to the mercy of the investing gods. So he fired his financial adviser and decided to try something most experts say you should never do: time the market. "Most people thought 2000 was the beginning of a secular bear market," says Parrish, using a term that describes a prolonged downturn. "People said you could still make money, but instead of buy and hold, you had to take a different tack." So he vowed to buy only when he thought the market was headed upward and to bet against it at other times.

Parrish, a retired human-resources executive with an MBA, is no babe in the woods when it comes to finance. He caught most of the market's gains from 2003 to 2005, turned bearish a bit too early in 2006, and with a portfolio entirely invested in bear-market mutual funds (which gain value when the stock market tumbles), he doubled his money in 2008. Since 2002, he reckons, his portfolio has gained an annualized 23%. "While everyone else has been crying in his beer, I've been a happy camper," says Parrish, 64, who lives near Sacramento, Cal.

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Contributing Editor, Kiplinger's Personal Finance