DALLAS — "Long-term retirement investors should keep their focus on their goals, and not on short-term market fluctuations, including even the recent market volatility that has seen major stock market indexes make daily large fluctuations since the first of October," said GuideStone President O.S. Hawkins.
The volatility, caused by a host of geopolitical uncertainties, as well as concern in the markets of the end of the Federal Reserve’s quantitative easing, has led to much of the uncertainty.
When dealing with a period of volatility, GuideStone recommends keeping four principles in mind:
Always focus on your objectives, not your emotions.
Specifically regarding retirement participants, these assets are to serve needs for a long period of time. Make sure your objectives and actions are consistent with your time horizon. Investors can choose from the MyDestination Funds, a family of target-date funds tied to different years that have a dynamic asset allocation that grows more conservative as you move to and through retirement, or can also choose to use GuideStone’s GPS: Guided Planning Services* to assist in determining an age-appropriate investment allocation.
Avoid making impulsive decisions.
“Guard against making ad hoc changes in your portfolio,” Hawkins said. “Making changes based on short-term market movements is almost a guarantee for failure as it promotes ‘buying high and selling low.’”
The performance of your account moving forward will be determined based on results of the financial markets in the future, not the past. Selling today cannot avoid yesterday's losses in a down market. Likewise, in an up market, you cannot buy yesterday's performance by investing in the hottest fund.
Don’t count losses (or gains).
Consistent contribution to a retirement plan affords investors a systematic way of taking advantage of investment opportunities as markets ebb and flow.
Maintain realistic expectations about market behavior.
Financial markets in the short term tend to fluctuate in response to social, political and economic events. However, historically, the markets stabilize and return to profitability over the long-term, focusing on the underlying fundamentals.
While recent market volatility understandably may leave some investors concerned, the markets have historically rewarded investors who applied these principles. For example, the day before the September 11, 2001, terrorist attacks, the Dow Jones industrial average closed at 9,605.51. While a steep sell-off ensued when trading reopened, by early November, the market had recovered all of its losses, closing on November 9 at 9,608.
“Stay well-balanced, stay well diversified and stay invested,” said GuideStone Capital Management, LLC, President Ron Dugan.
GuideStone participants who would like to learn more about their funds can visit the GuideStone website or can speak to someone about their account by calling a Customer Service representative at 1-888-98-GUIDE (1-888-984-8433). Participants who want to access the GPS: Guided Planning Services can log in to their account at www.GuideStone.org, or by calling GuideStone.
You should carefully consider the investment objectives, risks, charges and expenses of the GuideStone Funds before investing. A prospectus with this and other information about the Funds may be obtained by calling 1-888-GS-FUNDS (1-888-473-8637) or downloading one at www.GuideStoneFunds.com. It should be read carefully before investing.
The MyDestination Funds® (“Funds”) attempt to achieve their objectives by investing in the GuideStone Select Funds and other investments. 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. The expense ratio for the fund includes the expenses of the underlying 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 and other investments. 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 Funds are not guaranteed to increase, are 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 and retail investment products are made available through GuideStone Financial Services, member FINRA.
*Investment advice provided by GuideStone Advisors, a controlled affiliate of GuideStone Financial Resources.