Curtis D. Sharp
Executive Officer for Denominational and Public Relations
214-720-2127
Curt.Sharp@GuideStone.orgDow 10,000: What now?
October 15, 2009
DALLAS — Market pundits, average investors and analysts expressed a mixture of excitement and skepticism as the Dow Jones Industrial Average closed above the 10,000 mark for the first time since October 3, 2008.
American and world stock markets have witnessed a turbulent 18 months as markets worldwide lost close to half their value between October 2007 and March 2009. Markets have significantly rebounded since then throughout the summer and fall of 2009.
The Dow Jones Industrial Average hit its high above 14,000 in October 2007. It slid below 10,000 in October of last year, before bottoming above 6,600 in March 2009.
“We think everyone is expressing relief as the markets continue an upward trend,” said GuideStone President O.S. Hawkins. “While we do not know when they’ll regain all of the value lost since October 2007, we know that markets are cyclical, and that if history is any guide, they will eventually return to pre-recession levels.”
Skepticism has been expressed by some that this market recovery will be short-lived. Many pundits have reduced the question of the economy’s recovery to a series of letters to describe the “shape” of the recovery. A “V-shaped” recovery would include a deep drop, followed by a steep climb. A “U-shaped” recovery would be a steady drop, followed by a slow climb. And a “W-shaped” recovery would have a drop, followed by a steep climb, followed by another drop and then growth. The “W-shaped” recovery is sometimes referred to as a “double-dip.”
“While guessing the market’s direction, or the shape of its recovery, is the meat and potatoes of cable news and finance channels, long-term investors — as we encourage our retirement investors to be — should instead focus on long-term investing principles,” Hawkins said.
Those principles include making regular contributions to your retirement account, making sure you are contributing enough and investing in an appropriate asset allocation based on your risk tolerance and time horizon. GuideStone offers helpful calculators on its MyGuideStone™ online service to help its participants gauge their retirement investments and determine if they are on-track with their retirement investments.
“Many investors who fled the equity markets near the bottom in March of this year have missed the growth in the market since then,” Hawkins emphasized. “This is commonly referred to as 'locking in your losses,' and is something less likely to occur to those who don’t let short-term market swings impact their decision-making.”
One word of caution: Changes in the market may have caused your selected asset allocation to change. It is important to consider reallocating your account periodically to ensure that your account remains properly allocated. One approach to maintaining an age-appropriate asset allocation is investing in the GuideStone Funds MyDestination Funds®, five date target funds designed to adjust their ratio of equity investments and fixed-income investments as you move to and through retirement. For more information about GuideStone’s MyDestination Funds, participants may talk to a customer relations specialist by calling toll-free 1-888-98-GUIDE (1-888-984-8433).
“Whether the stock market continues on its upward climb, or if it meanders near 10,000 for weeks or months, or if it drops again, it’s important to remember that, while historic trends are no guarantee of future results, the market has rewarded those investors who develop a plan and stick to it,” Hawkins said.
You should carefully consider the investment objectives, risks, charges and expenses of GuideStone Funds before investing. For a copy of the prospectus with this and other information about the funds, please download a prospectus (pdf) or call 1-888-98-GUIDE (1-888-984-8433). You should read the prospectus carefully before investing.
The MyDestination Funds (“Funds”) attempt to achieve their objectives by investing in the GuideStone Select Funds. The Funds are managed to a retirement date (“target date”) by adjusting the percentage of fixed income securities and equity securities to become more conservative each year until reaching the retirement year and then approximately 15 years thereafter. The target date in the name of the Funds is the approximate date when an investor plans to start withdrawing money. By investing in the Funds you will also incur the expenses and risks of the underlying Select Funds. The principal risks of the Funds will change depending on the asset mix of the Select Funds in which they invest. You may directly invest in the Select Funds. The Funds’ value will go up and down in response to changes in the share prices of the investments that they own. The amount invested in the Fund is not guaranteed to increase, is not guaranteed against loss, nor is the amount of the original investment guaranteed at the target date. It is possible to lose money by investing in the Funds.
GuideStone Funds shares are distributed by PFPC Distributors, Inc., a registered broker-dealer and underwriter of the funds, 760 Moore Road, King of Prussia, PA 19406.
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