How Media Excess Can Mess With Your Wealth

Don't let an inundation of news scare you away from your long-term investing strategy.

John Woerth, a spokesman for the Vanguard fund family, says he measures the hysteria of the media by the number of talking heads appearing at any one time on CNBC. At 2:40 p.m. on August 8, with the stock market sinking fast, the dreaded "octo-head" materialized. Woerth reacted by sending out a wry e-mail suggesting that it was time to sell stocks and buy Spam and bottled water.

Meanwhile, he reports, relatively few Vanguard customers sold stocks or stock funds, and those who did sell were roughly matched by those who bought (Vanguard is the largest mutual fund company by assets; see Vanguard’s Fad-Free, Low-Fee Approach for more on the fund juggernaut). This occurred on a day when some commentators were saying that investors were “running for the hills” and “cashing out.”

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Bob Frick
Senior Editor, Kiplinger's Personal Finance