Excerpted from Common Sense on Mutual Funds by John C. Bogle, pages 21-22

The financial media provide a good place to begin our review of the eternal search for market-beating returns, whether through market timing or other means. The media reflect the actions of the financial markets, which are determined by the investment decisions made by all investors. The media also magnify the impact of market actions by highlighting - and, in some respects, sensationalizing - them.

Consider two covers from Business Week, one of our nation's most respected business periodicals. On August 13, 1979, Business Week ran a cover story called The Death of Equities. As Figure 1.4 reveals, the story's timing could hardly have been more unfortunate. The Dow Jones Industrial Average of stock prices was at 840 when the article was written. It rose to 960 by the end of 1980. In the next two years, the index declined. It scraped 800 in July 1982, but then rebounded to 1200 by May 1983. Business Week then ran another cover story, called The Rebirth of Equities, on May 9, 1983, after the near-50 percent market rise that had ensued since the August 1979 article. After the publication of the 1983 article, I said to one of my colleagues, Watch out, the fun is over. And the equity market fun was sidetracked, if only for a while. Business Week said Sell when the Dow Jones Industrial Average was at 840, and Buy after it had climbed to 1200. Yet two years after the buy recommendation, in May 1985, the Dow still languished at about 1200.

It may be unfair to single out these Business Week classics. TIME gave us an equally poignant example of the hazards of taking strong and unequivocal stands on the future course of the stock market. In its September 26, 1988, issue, TIME ran a cover story titled Buy Stocks? No Way. The cover pictured an enormous bear. The article included these pearls of wisdom about the stock market: It's a dangerous game ... it's a vote of confidence that things are getting worse ... the market has become a crapshoot ... the small investor has become an endangered species ... the stock market is one of the sleaziest enterprises in the world. When those words were published, the Dow Jones Industrial Average was at the 2000 level, down from the peak of 2700 reached just before the market crash of October 1987. Since then, the Dow has topped 9000 - greater than a fourfold increase. Investors who acted on TIME's conclusion would have sat mournfully on the sidelines through one of history's most powerful bull markets.

I intend neither to slam Business Week and TIME nor to offer them up as the perfect contrary indicators - those wonderful sources whose advice is so consistently wrong that we can count on profits simply by doing the opposite. My point is: The market is simply unpredictable on any short-term month-to-month or even year-to-year basis. We should not expect it to be predictable, nor should we base our investment decisions on impulses inspired by the conventional wisdom of the day. Whether they come in large headlines in respected publications or arise from our own daily hopes and fears, these calls to action generally have a short-term focus that muddles our view of the long pull.