http://www.vanguard.com/bogle_site/sp20030605.html
A reader asks, "What is market timing and why is it bad?" and "What are mutual fund managers buying thse days?"
Conventional wisdom has it that "market timing" — cashing out your portfolio when you anticipate a downturn, and the reverse — is a foolish strategy because no one can accurately pinpoint when the market has reached its apex or its bottom. The objection is valid, and you should hold your long-term investments (for retirement, for example) through thick and thin; if history is a guide, stocks trend upward over any period of length. On the other hand, it makes pefect sense to apply financial rule #1 — buy low, sell high — when you need to liquidate securities to finance a major purchase, such as a down payment on a house. For more on the perils of market timing, click on the link above to John Bogle’s words of wisdom. Bogle founded the Vanguard group and was its CEO for many a long year.
What are the smart guys buying and holding? As of the end of January, Joel Tillinghast, head honcho of Fidelity Low-Priced Stock Fund, had placed bets on Bed Bath & Beyond, Oracle, United Health Group, and the Brazilian oil Goliath, Petrobras. [Source: Semi-Annual Report of January 31, 2008, compared with Annual Report of July 31, 2007.] As the year began, Will Danoff of Fidelity Contrafund had significant positions in Google, Apple, Berkshire Hathaway, Exxon Mobil, Hewlett-Packard, and Procter & Gamble. [Source: Annual Report of December 31, 2007.]