There's nothing better than being smarter than the market. Anyone who put cash to work in equities in early March, when stocks were notching a 12-year low, looks like a genius today. The contrarians on equities at the time -- those who were greedy for stocks when others were fearful of them -- have done very well for themselves. The Dow Jones Industrial Average and broader S&P 500 are up 25% and 30%, respectively, since that terrifying second week of March.

Make no mistake: Market timing is not an investing strategy (unless you have a crystal ball), but zigging when the rest of the world is zagging most certainly is. After all, the whole point of investing is to find assets that are mispriced -- to go against the grain of the market's conventional wisdom -- and profit from its miscalculations.

See our 5 contrarian investment ideas

The rally in stocks appears to have petered out recently. And the corporate bond marketor as one investor put it to us, "cash is trash; and interest rates are so low that savings accounts, CDs and money-market mutual funds can't generate anything but the most pitiful returns.

But it's at times like these, when nothing seems to be working, that contrarian ideas can be the best ideas. With that in mind SmartMoney surveyed market professionals to suss out their favorite out-of-favor ideas. Here, then, is a look at five contrarian picks for your portfolio.

As the U.S. government goes hat in hand to borrow money to help pay for its unprecedented deficits, the rest of the world -- also known as our creditors -- is understandably worried. The forecasted recovery in the U.S. economy looks to be tepid at best, but with short-term interest rates targeted at essentially zero, a massive bout of whiplash inflation seems inevitable.

That's the conventional thinking on the dollar anyway, which investors are dumping in droves. The U.S. Dollar Index, which measures the greenback against a basket of major currencies, is off 10% from its 52-week high set in early March.

Long term the dollar looks to have plenty of challenges, but short term it looks good to Brett D'Arcy, director of investment research at CBIZ Financial Solutions (CBZ), a Cleveland-based financial-services firm. "While we do believe in the threat of inflation domestically, which is not good for the dollar, we think the overriding theme is that the U.S. will come out of this global recession better and faster than the rest of the world," he says. "And there will come a time in the next six to nine months that the Fed will raise interest rates. Both of those are very dollar-strengthening."

Health-care stocks are defensive: They're supposed to hold up better when the rest of the market falls ill. That's certainly been the case over the last 52 weeks: The health care sector might have lost 17% during that time, according to Capital IQ, but only one sector -- consumer staples -- performed better (down 15%). Meanwhile, the broad market lost 30%.

But now that the market's appetite for risk has returned with a vengeance, defensive stocks have fallen out of favor. Indeed, on Thursday analysts at Bank of America (BAC) warned clients that health care stocks have become a value trap, which is a way of saying: Sure, they look cheap, but they'll probably underperform. And then, of course, there's the overhang of the Obama administration's proposed health care reform.

Doug Roberts, chief investment strategist at Channel Capital Research, a Shrewsbury, N.J., investment management firm, disagrees. "Everyone says health care is going to lag because it's defensive," Roberts says. "But the recession isn't over yet."

Even more important to Roberts, the health-care sector's gross margins are "huge." At 40%, they're second only to telecommunications' gross margins, according to Capital IQ -- and far ahead of every other major sector of the S&P. And as far as health-care reform goes? "The only thing that could be a problem is if they create a Canadian-style system," says Roberts, "but I don't think that is in the cards."

California is facing a whopping $24 billion budget crisis. New York State is grappling with an unprecedented $13 billion budget gap. Hawaii is furloughing state employees to save money, Idaho cut aid to public schools and other states are initiating taxes on everything from candy to alcohol to cellphone ring tones. In total, states are facing a budget gap of $121 billion in the coming fiscal year, according to the National Conference of State Legislatures.

The fiscal nightmare playing out in towns, cities and states across the country hardly makes municipal bonds look like a good bet these days. Just don't tell that to Bill Walsh, president of Hennion & Walsh, an investment manager in Parsippany, N.J. "No one is saying buy municipals right now, but historically the default rate is nominal, it's nothing," he says. Also, don't forget that the Obama administration is almost certainly going to raise taxes -- and munis are tax free, a huge plus, he says. Then there's all that stimulus money going into building infrastructure -- yet another boon for munis.

However, a great deal of due diligence is in order before jumping into munis, Walsh says. Muni default rates are low, but some of them still do go bust. Walsh says stick with single issue, general obligation bonds for essential things like sewers, sewage treatment and water. Munis are also relatively complicated for the average investor. "You can pick them yourself but for the most part you need an advisor," Walsh says.

When stocks go up, bonds are supposed to go down -- and vice versa. That's why one of the stranger things to come out of the recent equity rally is that corporate bonds have gone gangbusters, too.

Risky, high-yield corporate debt (bonds issued by companies with less-than-stellar credit quality, or junk bonds) have shot up 30% since the S&P 500 bottomed in March. With corporate earnings expected to plunge another 35% to 40% in the second quarter alone, according to Thomson Reuters, this high-risk bond rally really seems rather overdone.

But that hasn't dissuaded Joe Clark, managing partner of Financial Enhancement Group of Anderson, Ind., from buying more of HYG, the exchange-traded fund. "I really believe that you will see debt produce returns this year like stocks do in a normal year," Clark says. "We were worried that as a lot of this debt was issued this year that you would see corporate bonds really get hit. And it's been the exact opposite." The market's appetite for this stuff seems insatiable at the moment, he says, and until it's sated, investors should go with the returns.

It's a distant memory today, but in the summer of 2007 private-equity shops were the undisputed Masters of the Universe. Cheap credit and cash-rich corporate balance sheets made private equity-led leveraged buyouts a booming business -- and a seemingly endless money machine for these outfits. Naturally that caused great excitement when private-equity big shot Blackstone Group (BX) went public in June 2007 at $30 a share. But woe unto those investors who jumped on the bandwagon back then. Blackstone's shares are off 75% since going public (and were down nearly 90% as recently as February).

So what's to like about Blackstone? "They have the brains, the bucks and the culture," says Karl Mills, president of Jurika, Mills & Keifer, and manager of the Counterpoint Select Fund (CPFSX). "They went public at the top of the market. That was brilliant."

Meanwhile, while the rest of Wall Street is going through an identity crisis trying to sort through all the recent shotgun mergers, acquisitions and bankruptcies, Blackstone's culture remains fiercely focused and unchanged, Mills says. And finally, there's the bucks: "They're sitting on a war chest of about $27 billion in cash, they have a thriving asset management business, a growing mergers and acquisition business, and they took no TARP money," Mills says. The bottom line? Blackstone is poised to scoop up tons of distressed assets (commercial real estate, for example) at fire-sale prices.