GuideStone, amid DC gridlock, issues advisory

Baptist Press
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Posted: Oct 11, 2013 5:22 PM
DALLAS (BP) -- The partial shutdown of the federal government has prompted GuideStone Financial Resources to issue an advisory to its retirement plan participants to "stay the course" in their investments/savings.

Congressional gridlock over the Affordable Health Care Act, or Obamacare, pushed the government into its partial shutdown at 12:01 a.m. Oct. 1 at the start of the federal fiscal year.

GuideStone, the financial services entity of the Southern Baptist Convention, notes in its Oct. 10 advisory, "The concerns over government and fiscal issues have led to uncertainty, which in turn, has led to market volatility and moderate corrections. Despite these events, today's S&P 500 Index level is above its level in August of this year."

The advisory acknowledges, "Historically, government shutdown and debt-ceiling discussions have caused an increase in short-term volatility." Ron Dugan, president of GuideStone Capital Management, is quoted as stating, "These types of events tend to be temporary in nature, with markets typically turning their focus toward economic data and company fundamentals once solutions have been reached."

The advisory counsels, "Most experts believe that the debt ceiling will be raised before the deadline and that investors should maintain their long-term strategic asset allocation. We agree." Joy Roberts, GuideStone's personal financial services director, is quoted as saying, "Stay the course unless your retirement timeline or needs have changed. We believe a well-diversified portfolio gives investors the best opportunity to successfully meet investment goals."

GuideStone serves more than 36,000 churches and ministry organizations and

more than 163,000 retirement plan participants. Total defined

contribution retirement plan assets exceeded $8.8 billion as of

September 30, while total organizational assets of GuideStone

exceeded $12.3 billion.

The full text of GuideStone's advisory follows:

U.S. stock market reached its peak in September in the midst of concerns over Federal Reserve policy and the potential for reducing quantitative easing. After the Federal Reserve's announcement in September to stay the course, investors' attention was redirected toward Washington D.C. with concerns over the government shutdown, the raising of the debt ceiling and default worries.

The concerns over government and fiscal issues have led to uncertainty, which in turn, has led to market volatility and moderate corrections. Despite these events, today's S&P 500 Index level is above its level in August of this year.

Although past performance is not always an indicator of future performance, we can look to the recent past for some insight. Historically, government shutdown and debt-ceiling discussions have caused an increase in short-term volatility. Ron Dugan, president of GuideStone Capital Management, states, "These types of events tend to be temporary in nature, with markets typically turning their focus toward economic data and company fundamentals once solutions have been reached."

Until a resolution comes out of Washington D.C., market volatility will most likely persist. However, political agreements can occur suddenly, with the capital markets responding immediately, making it very difficult to be successful as a market timer or active short-term trader.

Most experts believe that the debt ceiling will be raised before the deadline and that investors should maintain their long-term strategic asset allocation. We agree. Personal financial services director Joy Roberts said, "Stay the course unless your retirement timeline or needs have changed. We believe a well-diversified portfolio gives investors the best opportunity to successfully meet investment goals. Turn off your electronics if necessary to avoid the urge to be reactive."

If you do not currently have a long-term strategic plan, this would be a good time to implement one by working with a personal financial adviser at GuideStone Financial Resources.

Compiled by Baptist Press editor Art Toalston. GuideStone Financial Resources of the Southern Baptist Convention is on the Web at www.guidestone.org. Get Baptist Press headlines and breaking news on Twitter (@BaptistPress), Facebook (Facebook.com/BaptistPress) and in your email (baptistpress.com/SubscribeBP.asp).

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