Here you are again, facing trepidation as the stock market churns.

The recent uncertainty in the market would be a lot easier to stomach if you could believe the investment industry's old refrain to "buy and hold." But when people lose 56 percent of their stock market money, as some did in 2007 to 2009 during a bear market, even a few down days can keep them awake at night, asking whether they are foolish to hold their usual stock and bond funds.

That's why I turned to Harry Markowitz, the Nobel Prize-winning finance professor who gave birth in a 1952 paper to what's known as "buy and hold" investing -- a hallmark of professional investing.

As it turns out, Markowitz said, "I've never been a buy and hold guy," and he thinks his "modern portfolio theory" has been misapplied into naively staying the course when deeper analysis is warranted.

With his own money, he departed from the rigorous practices some believe go back to his analysis of portfolios, which received the Nobel in 1990.

Early in his career, he did not take the risks some investment advisers suggest for young investors to maximize returns.

Rather, he saved regularly and put half his money into stocks and half into bonds to grow while controlling risks. When he thought he had accumulated too much in either category, he stopped putting money there for a while and directed savings to the neglected group.

That is known as "rebalancing" and is done by professionals to try to secure high returns while cutting risks. But Markowitz took it on loosely rather than moving money between stocks and bonds every quarter, as some do.

"I never sold anything," he said. If stocks were increasing in value, he would let that portion grow for a while, but eventually he would stop stock purchases and beef up the bonds. The idea: The bonds would insulate him from the downturns that crush stocks from time to time without clear warning.

And what did he do recently, in one of the worst bear markets ever? He reduced his exposure to stocks markedly before the downturn began.

The impetus came when Bear Stearns announced in 2007 that a hedge fund had collapsed.

Markowitz saw it as potentially a "tip of an iceberg" for problems in the financial system and a sign that stocks could become more risky than history suggested.

He made no changes in the mixture of stocks and bonds in his 403(b), his workplace retirement savings plan, but he sold the stock exchange-traded funds in an outside brokerage account to prevent losses he could have absorbed.

At 82, he has a large municipal bond portfolio. "My short-run objective is to have enough in municipal bonds so that if I die tomorrow my wife can live off the interest," he said.

He left the money from selling the stock funds in a money market fund until the Federal Reserve raised interest rates.

Because he was worried about inflation, he bought commodity funds. He was lucky enough to sell the funds just before the bubble burst, he said, but he didn't know there was a bubble. Rather, he saw housing prices falling and used the money to buy a condo overlooking the San Diego harbor as an investment.

That turned out to be his one financial mistake because the condo has lost value, but Markowitz says he and his wife, Barbara, are enjoying the view.

"You'd almost think I knew what I was doing," Markowitz jokes.

But he notes that he had no certainty what the market would do and simply was adjusting investments based on what he perceived as increasing risks as he observed the fundamentals in the market.

That's where he thinks some fail to understand modern portfolio theory. There are times, he said, when portfolios should be adjusted if risks appear outside the norm -- periods such as the technology bubble and recent financial crisis.

Still, for those less willing to make moves in their portfolios, he claims that buy and hold strategies won't lead investors far off course.

"Say you were 65, and invested $1 million, with 60 percent in stocks and 40 percent in bonds," he said. "It became $800,000, and you are not happy, but you lived to invest another day."

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gmarksjarvis@tribune.com