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Is it possible to lose money investing in the stock market when the market is rising? If you believe the answer is no, you may want to check your bank accounts over the past decade. This is exactly what happened to you, and the Israeli public in general: huge losses during one of the most flourishing eras that the Israeli capital market has known.

During the decade between July 1996 and June 2006 the Tel Aviv Securities Exchange (TASE) index rose by 301 percent. That pace is impressively enormous, representing a nominal yield of 14.9 percent. Seemingly, there is nothing simpler than making a profit on an exchange rising so sharply: the only thing you need to do is buy shares and then hold on.

And that's the one thing the Israeli public didn't do. A market strategist from the Psagot Ofek group, Gadi Toledano studied the public's deposits and withdrawals of mutual funds during that decade.

The consistency of the Israeli public became immediately obvious: the public always bought funds during months that the market was on the rise, and sold when the market was falling. In capital market terms, the public consistently entered at the top (high prices), and exited at the bottom (low prices).

This consistency produced the following mathematical miracle: the public bought a net total (deposits less withdrawals) of NIS 2.67 billion in mutual funds over a decade. Compared with the Israeli public's total portfolio - more than a trillion shekels - this represents a ridiculous sum.

But even more ridiculous is the result of the investment: at the end of the decade the sum of NIS 2.67 billion shrank to a mere NIS 1.12 billion. In other words, the public succeeded in losing NIS 1.5 billion out of an investment of NIS 2.67 billion - as the market rose by 301 percent.

How did this wonder happen? Throughout the entire period the public erred in timing its investments, and thus managed to turn a booming market into a investing disaster.

Toledano's study reveals just how absurd this disaster was. He checked what would have happened if the public, instead of jumping in and out of the market at all the wrong times, and kept to the strategy of steadily buying stocks each month. Spreading the NIS 2.67 billion in 120 equal investments would have yielded NIS 5.43 billion by the end of the decade - a net profit of NIS 2.76 billion.