Two Truths and a Lie About Market Volatility


If you try to diagnose the ups and downs of the market, you're not alone. Occurrences like market volatility can cause investors to search for direction and guidance on the best next steps.

At GuideStone®, we are committed to helping you navigate your journey to and through retirement — and that includes unpredictable times.

To help you better understand how you should — or shouldn't — react to the market, let's break down two truths and a lie about market volatility.

Truth: You should expect volatility.

Increased market volatility, whether influenced by economic crises, upcoming elections or a global pandemic, is a very common and normal occurrence.

The stock market — as measured by the S&P® 500 Index — experiences price swings of 1% or more some 62 times a year. The same broad index of the stock market averages only 71 trading days between declines of 5% or more.1

These ups and downs may be hard to handle emotionally but should not be the driving reason for making wholesale changes to your investment allocation. Because periods of volatility like this are anticipated, your portfolio should be prepared to endure this type of environment if you've chosen an investment strategy that reflects both your time horizon and risk tolerance — assuming neither of these has changed. GuideStone Chief Strategic Investment Officer David S. Spika cautions retirement investors against allowing dramatic headlines to prompt making impulsive decisions, even as the news of the day can appear alarming.

We encourage you to continue making consistent contributions and maintain proper diversification in order to progress toward your financial goals.

Truth: You should stay focused on your long-term goals.

While volatility can be unnerving, the best course of action for you as a retirement investor is to stick with your long-term asset allocation plans.

"It is impossible to time the market," says GuideStone President Emeritus O.S. Hawkins. "In fact, the market has historically rewarded those with long-term perspectives. Retirement account performance moving forward is based on results of the financial markets in the future, not the past. While it's easy to focus on the headlines and emotions brought on by the 24/7 news cycle, GuideStone believes it is best to avoid overreacting and for investors to stick to their long-term plans."

Lie: You're on your own.

Worry and stress are common during market volatility, but it's important for you to remember that you're not alone. GuideStone is committed to personally addressing your concerns and questions because we care about your financial future.

We are available at 1-888-98-GUIDE (1-888-984-8433) between 7 a.m. and 6 p.m. CT Monday-Friday to talk through any issues and help make sure your investment strategy aligns with your goals and preferences. Additionally, we also offer point-in-time advice if you would like to speak with an advisor. Contact us at to set up an appointment.

Advisory services offered through GuideStone Advisors®, a SEC Registered Investment Adviser. GuideStone Advisors is a controlled affiliate of GuideStone Financial Resources. For more information about the firm, products and services, please review the GuideStone Affiliate Form CRS.