Think back no further than 1991 for a good example. The U.S. stock market had been down the year before, and many predicted another bad year - to mark the end of the Eighties, so to speak. Heedless of these warnings, stocks went ahead and climbed 26.3% not including dividends, making for one of the best years on record. But you had to be in the market consistently to reap the reward. A full two-thirds of it came in the 21 trading days beginning on January 16 - the most frightening day of the year, when Operation Desert Storm was launched; the rest came during the year-end holiday season. If you were on the sidelines during those few days - 28 out of a year's total of 253 - you missed all the appreciation of stocks in the best year of the Nineties to date.

Indeed, the main factor working against market timing is that stock gains tend to come in brief, intense bursts. Miss enough of them and you lose all the advantage that led you into stocks in the first place. Going back to 1926, U.S. stocks have returned eight tenths of a percent per month on average. During the best TABULAR DATA OMITTED 60 months in these 68 years - the best 7% of the time - the return averaged more than 11%. In all other months - the other 93% of the time - the return of stocks was almost nil.

Adding to the evidence against market-timing is the fact that it hasn't taken long in the past for stocks to return to their prior peaks and then climb higher. On average, post-war bear markets have lasted almost a year and returned to prior peak levels in eight months more. Even if you were unlucky enough to have bought into the market just before the sharp decline of 1987, you'd have been back at your initial value a year and a half later with dividends reinvested - unless you sold out, that is. By midyear 1994, you'd have been up another 75%. Periodic descents are a fact of life in stock investing, but the more potent reality is the long-term climb.

ILLUSTRATION OMITTED

EXHIBIT2

ANALYSISOFMARKETGAINS

Stockreturnstendtocomeinbriefbursts;missenoughofthemand

youlosealltheadvantage.

1991S&P500Numberof

AppreciationTradingDays

EntireYear26.3%253

Jan16-Feb1317.621

Last7Days9.07

Restof1991(1.5)225

1926-92PercentofAverage

AllMonthsMonthlyReturn

S&P500totalreturn:

816months100%0.82%

Best60months711.06

Allothermonths930.01

Source:Bersteinestimates