Once again, don't believe everything you hear.

• Author: Weinstein, Steven B.
• Position: Media coverage of investment markets - Includes related article - Personal Financial Planning

The time was 5:30 a.m. on the Monday before the Fed was due to raise interest rates for the sixth time in 1994. I flipped on the radio and heard the station's business reporter interviewing a broker on how fixed-income investors should respond to recent bond-market trends. Without hesitation, the broker replied, "Sell. People need to put their bond losses behind them and move on."

That answer was disturbing on several counts. Although the broker's motivation was obvious (brokerage firms make money when people trade), as a trading strategy, the advice was curious. Historically, a good way to make money in bonds has been to buy into bear markets, picking up yields at attractive prices. And as an investment strategy, the advice was questionable. It's hard to see how selling an investment that's meeting its objectives - especially selling near the bottom of the market - would help any investor.

But the most disturbing part of that exchange was the manner in which the reporter conducted the interview. I felt as if I were listening to the investment markets' pre-game show.

This kind of market reporting is all too frequent today. A national newspaper expresses surprise that investors continue to invest in the stock market despite a recent correction, much the way a commentator might question a coach's decision to keep a quarterback with a sore arm. Popular financial magazines feature pundits picking next week's or next month's "winners." The latest investment standings - a slew of rankings, ratings, and performance statistics - are delivered to individual investors with on-line urgency and the implication that the past is prologue to the future. And investors are increasingly left with the sense that every day represents another market showdown.

Such coverage isn't limited to the investment markets, of course. By its very nature, the popular media focuses intense attention on a topic for a while and then moves on. This also has had some positive effects. With the increased attention being paid to the markets and the broader dissemination of market news via print, TV, radio and computer, more people are more informed about the markets and different investment alternatives than ever before.

EVERY DAY ISN'T A GAME DAY

On the other hand, the sense of urgency the media often brings to news of the investment markets creates the impression that investors should constantly be doing something to respond to even slight or temporary changes in market...