Volatility in the stock market reached an all-time high last fall when the world thought the sky was falling. And even though it has calmed down in 2009, volatility levels still rival previous high points of the past two decades, such as the fall of 2002, as the markets were sliding to new lows and recession was in the air; or late summer and fall of 1998 as the Russian financial crisis and the spectacular blowup of Long-Term Capital Management dominated the news; or the fall of 1990, just after Iraq invaded Kuwait.

Here in the summer of 2009, we're at those same levels of volatility, but only after significant recent declines in the VIX index.

Investing was certainly easier in the days of the more traditional, slow-rising trend. All you had to do was endure the jolts and bounces that surrounded that general upward slope.

But when the market is characterized by drastic ups and downs and there is no general trend, how can investors expect to gain anything?

The fashionable answer is that investors today need to be more tactical by moving in and out of specific investments more quickly.

This is a major shift in strategy. You no longer are riding the market, which presumably would only give you an angst-ridden roller-coaster ride anyway. If you take it to the extreme of picking individual companies, you've become a stock jockey.

To be sure, the mantra that "buy and hold is dead" does have a certain rebellious appeal. And the statistics used to back up this assertion can be compelling. Stock data can be manipulated to show different results by making small changes in the time period covered, of course. But, over the past 10 years the major stock indexes have not even remained flat. They would have lost money for you. The Dow Jones Industrial Average has dropped 20% since June 1999, while the S&P 500 Index and the Nasdaq each have plunged 31% in the same time period.

Some in the market are looking for more short-term investing opportunities. Direxion Funds jumped into the leveraged ETF game last fall by launching eight such funds. (ProShares and Rydex also offer leveraged ETFs). In addition to a three-to-one leverage rate offered by Direxion's funds, they are tailor-made for a tactical investing approach since they allow for very short-term investments. On average, investors hold one of its leveraged funds less than a day.

"The past year has really been a trader's market," says Andy O'Rourke, senior vice president and marketing director at Direxion. "What we're saying is: 'Why just buy the market?' Look at the past 10 years, [the market has] been flat. If you want to buy the market and be flat, that's fine. But there are probably a lot of 60-year olds out there who don't want to do that."

Others aren't so quick to agree. Matt Hougan, editor-in-chief of IndexUniverse.com and senior editor of the Journal of Indexes, says: "It's a strange argument because when the market is down it is the best time to buy and hold."

And despite the tools that make tactical moves easy, trading costs also can pile up, Hougan notes.

But there is an even more fundamental issue that investors and advisors need to remember if they want to be more tactical, says Russel Kinnel, director of mutual fund research at Morningstar. They still have to buy and sell at the right time, even if they're using funds instead of individual stocks. That elusive goal of trading at just the right time is something that most investors have proven inept at, he says. They too often buy when prices are nearing a top and sell when they're close to the bottom. And, he adds, advisors are often not much better.

So the fact the ETFs are easy to trade is not always a benefit, Kinnel says. Instead, they just make it easier to make ill-timed moves.

Still, he says there is indeed value in good tactical allocations, but within certain limits. "Managers should be looking at where values are and how to manage risk," Kinnel says. "But having said that, I think [tactical investing] is a 'don't try this at home' kind of thing. We can't all buy at the low point and sell at the high point."

So, if tactical investing should be contained to a certain portion of a portfolio, what does all this mean to an advisor? Do you really have to become a stock jockey in the modern market to avoid the roller coaster?