The strategy forces you to time the market. You might get unlucky by holding cash during a market rally, then buy back for a dump.

An investor who sells when they think the market is going to go downhill, with the intention to buy back later is not acting as an investor but as a trader.

That's why hedging with options is less risky (and less profitable in the best case).

edit: My use of word 'unlimited' applies if you want to keep the same stake at the companies. In money terms you cannot lose more than the value of your holdings.