PALO ALTO, Calif. (CNN/Money) - Flip. Flop.

Those two words perfectly describe the market, investor sentiment and even President Bush's promise to seek a United Nations Security Council war vote "no matter what the whip count is."

Flip-flopping in uncertain times. Get used to it. But trade around it? That's much more difficult. I'd suggest against it.

Did it seem to anyone else that precious little changed between Wednesday night and Thursday afternoon to warrant the biggest stock run-up in five months? Sure, there was a rumor that Iraqi generals were planning a quick capitulation. And that would be good news. But there also was a rally-ette recently on a rumor that Osama had been bagged. Rumors don't a sustainable rally make.

Mr. Market decides on a Thursday that war is seeming less likely or that it'll be a quick war. Well, we've been thinking the latter for months now. And Don Rumsfeld is doing his darndest to assure us the former just isn't true. Read the papers about Iraqis digging tank traps in their front yards, and you'll understand that they don't think war is any less likely.

More to the point, the rally flies in the face of what is pretty much across-the-board weak economic news. Let the headlines of Friday's Wall Street Journal tell the story: "First-Half Growth Estimates Fade." "Jobless Claims And Falling Sales Illustrate Malaise." Someone forgot to tell the statisticians that the all-clear bell had been rung.

So here's the key set of questions. If the war doesn't happen or is quick and decisive, will the economy quickly turn around? And should the markets charge up anticipating such a development?

My guess is that if the geopolitical situation plays out well then the economy will turn the corner, but more slowly than optimists would assume. The aircraft carrier doesn't turn on a dime no matter how long its passengers have been hoping for it to change course.

The aforementioned if is a big if, of course, which is why it's important to have a short-, medium-, and long-term plan for your investments. Playing bear-market rallies is a game for pros -- and for fools.

Jim D. writes with a good semantic conundrum that reminds me of when money-losing companies report their quarterly "earnings," even though quarterly results would be more like it. He's responding to my suggestion here the other day that mutual funds remain the best place to invest one's savings. Take it away Jim:

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"Mutual funds are the best way to invest savings? Is this an oxymoron? Either you are saving your money or you are investing your money. I subscribe to Morningstar, and their supposedly 'great values' are funds that have only lost 5 percent this year, or only have lost 8.33 percent, but over the last 15 years have made 25 percent. So, if I buy these great funds, I'm losing money. If I put money in a money market fund or bank savings account -- even my checking account -- I am earning money, even if it's only 1 percent. Is there something I'm missing here?"

Jim, there's no question that parking money in a low- or no-interesting-bearing account is the safest way to go. Ditto for stuffing it under your mattress, for that matter. Inflation, when it returns, will diminish that approach, but it sure beats negative returns in the stock market.

I'd challenge you, however, on the assertion that investing in the market is the opposite of saving. True, you're losing money now in funds that track the market. But over time -- if history is any guide -- the only way you'll significantly outpace inflation is by investing. Having said that, the money you need in the short term better be in a safe place, somewhere you're truly saving it, not losing it.

Adam Lashinsky is a senior writer for Fortune magazine. Send e-mail to Adam at lashinskysbottomline@yahoo.com.

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