Before the stock market crashed in 2008, investors were simply buying stocks in the hope the bull market that began in 2003 would continue. After nearly all financial markets collapsed, however, many investors questioned the belief that holding stocks for long periods is worthwhile, and that diversifying into several types of assets (stocks, bonds, commodities, real estate) reduces overall risk. This new cynicism has lead more investors to try to time the market and avoid another downturn.

Unlike most portfolio managers, Mebane Faber, 31, is benefiting from a renewed interest in market timing. Two years ago, Faber published an article in the Journal of Wealth Management that showed a simple market-timing strategy — holding the S&P 500 index (SPX) when it is above a 200-day simple moving average (SMA) and exiting when it is below this threshold — earned more with less volatility than a buy-and-hold approach. (For an updated summary of Faber’s technique, see "How to avoid the next bear market," Active Trader, April 2009.)