Why the Fund Firms Tell You to Buy and Hold

Right now, at just about every fund company there's a kid tapping out a raft called "Investing in Volatile Markets" or "Living With a Market Decline," but taking investing advice from fund companies is a little like asking a car salesman if you need new wheels.

I should know, because I used to be that kid. When I worked at John Hancock Funds in Boston, part of my job was ghostwriting market commentaries for chief investment officer Robert Freedman, who presciently announced his retirement a week before the Nasdaq Composite peaked and started this pronounced, painful and prolonged slide.

Today most fund shops have similar postings on their Web sites. Fidelity, for instance, has a Q&A with venerable and retired fund manager Peter Lynch. In general these things prescribe the same thing: Hang on to those fund shares in your diversified portfolio. ...