Why is it that when the stock market sledding gets tough, newspapers and magazines trot out article after article on the "best places for cash" and "Top 10 money funds?" Money markets, CDs and the like are all the rage, yet for my money (and I do mean MY money), the focus should be on the "best stock funds for the rebound."

I'm thinking about this because of two unrelated incidents I heard about this past month. In one, a wealthy investor monitoring a couple of simplistic metrics, including the 250-day moving average for the funds in his portfolio, decided that because his funds had fallen below this average, they must be sold. He went to cash, and of course missed the month-end rebound.

In another case, dating back to the market's first-quarter decline, an investor sold out, called Vanguard Brokerage, asked for a high-yielding CD, and planted her money there. Little did she know that the CD's backer, IndyMac Bank, was on the verge of being shuttered by the Feds. She got her money, of course, but at what cost in time, anxiety and, ultimately, her long-range investment objectives?

Stay the Course with Vanguard Mutual Funds

It's amazing to me that folks who say they are investors with a long-term focus can make moves like these on a "whim" and a prayer (see also, "The 5 Worst Mistakes Investors at Vanguard Are Making Today"). Peter Lynch, the famed Fidelity stockpicker, was pretty succinct when he said, "The key to making money in stocks is not to get scared out of them."

He's right.

Market-timing doesn't work. One of the loudest market-timers that I can think of (I'll call him Doug) not only has one of the worst investment track records around, but once went so far as to promise to show how he would turn a $500,000 investment that he claimed was his own money into a million dollars in just 365 days using market-timing strategies he called the path to "riskless wealth." When Doug's portfolio fell to $250,000 after a few months, all mention of riskless wealth and the million-dollar promise disappeared. But wouldn't you know it–with the markets in upheaval, Doug has reappeared, pitching more of that same snake oil packaged in a slightly different bottle.

Stick with Proven Managers

The best investment strategy now is the same one we started the year with, and the one that's driven my Model Portfolios' returns for the past 17-plus years: Buy funds run by top-notch money managers, mix them in a portfolio that has the risk characteristics and return objectives that match your own, and then watch them carefully while sitting on your hands, making changes at the margin as circumstances warrant. (See also, "Is Vanguard's Board Looking Out for You?")

And why all the incessant worry? I don't think a stock market that has fallen 11.6% (Total Stock Market's return through July) warrants making wholesale changes to a well-thought-out investment strategy. Real investors see this as an opportunity to pick up some bargains rather than an opportunity to run for cover.

I believe several of the managers running funds at Vanguard, like the folks at PRIMECAP Management, Wellington Management and Barrow, Hanley, are doing just that. Let them make the moves for us while we monitor their progress. I know index investors have lost a decade, but my Independent Adviser for Vanguard Investors subscribers and I haven't! And we didn't try to market-time our way to profits, either.

To be a successful investor at Vanguard today takes more knowledge, independent research and a proactive strategy to manage risk. That's exactly what Dan Wiener aims to provide with in each and every issue of The Independent Adviser for Vanguard Investors. Sign up right now and you'll get up to 6 free reports with your very own RISK-FREE trial subscription.