So let's say you agree with what I wrote last week -- that the reason stocks are down so much is because all the "change" coming out of Washington is too much and too fast for our already-destabilized economy. How do you invest?

You could just stay out of stocks. That would have served you well the last year. But high-velocity "change" in government policy on banks, energy, unionization, trade and all the rest means high market volatility, and that means there's upside as well as downside. Do you really want to miss the upside just to avoid missing the downside?

Here's one approach you should consider. It's so simple it's almost fiendish.

The Congressional Effect Fund, a small start-up mutual fund, tries to exploit today's environment of political chaos by the simple strategy of staying safe in 100% cash whenever Congress is in session, and 100% invested in stocks whenever Congress is in recess.

The strategic logic is straightforward. When Congress is in recess, it can't cook up new and improved ways to ruin the economy. When it's in session, you'd better keep a firm grasp on your wallet.

Congressional Effect Fund founder Eric Singer, a former investment banker, discovered in the early 1990s that this simple strategy really works. He told me his research shows that over the last 44 years, average stock performance is substantially better when Congress is in recess.

It has nothing to do with Democrats or Republicans, liberals or conservatives. It's just Congress. In or out. It's that simple.

He says on days when Congress is in recess, the stock market has risen at an average annual rate of 16.3%. On days when Congress is in session, it has risen only one-third of 1%.

Over all that time, the average annual return of the S&P 500 has been 8.2%. That's what buy-and-hold would have gotten you, with the risk of having your money invested in stocks every single day. But if you'd been invested only when Congress was in recess, you'd earn 16.3% on those days -- and the money-market rate, on average about 5.5%, the other half of the time. Put it together, and you've got an average annual return of about 10.4% -- more than stocks, with half the risk.

Singer started the Congressional Effect Fund last May. Could he have chosen a worse time to start an equity mutual fund? Since then, through Wednesday, the S&P 500 has lost 47.1%, including dividends. His fund has lost only 6.3%, making it one of the best performing equity funds you could have owned.

Over the short life of the fund, Congress has been in session 13 times and on recess 13 times. On average, when it was in session, stocks lost 4.0%. When it was in recess, stocks lost only one-third of 1%.

OK, so stocks went down either way. But if you could go back and do it all over again, which would you rather do? Have your money in stocks and lose almost half of it? Or be in Singer's strategy, and lose a mere 6.3%? I'm sure I don't have to tell you that in today's world, a 6.3% loss is practically as good a gain.

The fund would have showed an actual gain if it weren't for just one single bad trade. On Oct. 3 last year, Congress passed the legislation enabling TARP, the Troubled Asset Relief Program, and then went on a long pre-election recess. Singer got his fund fully invested, but then got blindsided by what the Treasury Department did while Congress was out of town.

Remember, TARP authorized the Treasury to buy troubled assets or to write insurance on troubled assets. Treasury Secretary Henry Paulson had spent two weeks lobbying for those powers, saying that the world would come to an end if he didn't get them.

He got those powers, but then sat around for a week doing nothing. And the world did really just about end. The S&P 500 lost 18.1% in that single, horrible week.

The next weekend Paulson decided to use the TARP money to inject capital in distressed banks -- the law didn't say he could do that, but he did it anyway. And it pretty much stopped the market hemorrhage, at least for a while. But for the Congressional Effect Fund, the damage was done. Take out that one trade, and the fund would be miles ahead.

It just goes to show -- even the cleverest investment strategy can be fooled every once in a while, and the damage can be considerable. So the real test is whether a strategy can take a blow like that and still survive. It's a great credit to the Congressional Effect Fund that it very much survived, showing only a small loss overall, even after taking such a huge hit.

Over the last year there have been many, many bullets that investors needed to duck. I'd say that if you just got winged by a single one of them, you're doing pretty darn well.

And it shows something else, too, that may be even more important. It shows that for all the talk about how the Wall Street rocket scientists blew themselves up in this bear market with their too-clever model-based strategies, Singer has shown that a model-based strategy can actually work.

As always, investment success comes from figuring out a few simple truths, and acting on them with discipline.