Dear Readers:

We were curious about how our Market Timing approach had fared since the end of the data presented in the book (which covers 1900-2001), so we have updated it below. We followed the familiar formula: the dollar cost averager invests $100 in the S&P 500 on the first day of every month come rain or shine, while the Market Timer avoids investing on those months when all the metrics show the market is overpriced, but puts $200 into the S&P 500 on the first day of any month otherwise.

Here are the results from January 1, 2002 through June 30, 2004. The dollar cost averager has a total return of 17%, compared to the Market Timer's total return of 23%, for an improvement of 35% in total returns over the 2 1/2 year period.