Feelin' Shaky? Then Lay Off the Media and the Caffeine!

William Bernstein, financial theorist and author of The Four Pillars of Investing, said it best in a CNN Money website article, "Calming Words for Troubled Times":

"Get out of the market? Of course not, silly. If you think about it logically, you are rewarded for owning stocks precisely because they are risky; the dicier things look, the more money you can expect to make in the long run...History bears this out: The lowest returns were earned by buying high when there was a lot of blue sky - think 1928, 1969, 1999. And the best returns were earned by buying low in 1932, 1942 and 1982, when it looked like the whole world was going to hell. One more thing: Stop watching CNBC. It will make you stupid and poor. If you must watch, turn off the sound. It becomes an excellent substitute for Animal Planet."

A LMF4HMW reader surely doesn't lose the irony between his "calming words" and the title of the piece still promoting the idea of "troubled times". The main point of my article today is to calm your fears. The sky is not falling. We do not need more government intervention. And volatile markets are normal.

Let's face it -- the sensationalism addicted media is bored right now. Calm, positive news just doesn't sell stories. We've had to put up with political coverage for the 2008 election since about 2006, so even the talking heads are getting sick of it. There is some success in Iraq given the troop surge (although you won't hear much about it given the agenda), and there haven't been any lacrosse "scandals" (the real scandal was the media's biased treatment of the issue) of late. So when you've got to sell ad space -- i.e.: FREAK OUT about something, it might as well be the economy!

In one of my first posts, I talked about putting together a long-term financial plan. Successful investing is not about derailing your efforts because you heard some bad news or have an icky "feeling". Just as a rock hard body is crafted by shunning impromptu scoops of Rocky Road in favor of your training plan, a strong portfolio is made by adhering to your strategy.

So instead of being glued to the tube or "news"paper in awe of all the ills of the financial markets, take some advice from mother, who always knows best: "Turn off that television! Go play outside!"