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Providence and America

STOCK MARKET: Retirement investors advised to keep long-term goals in view

The opinions expressed by columnists are their own and do not necessarily represent the views of
DALLAS (BP)--American stock markets fell Monday, Aug. 8, in the wake of Standard & Poor's announcement the previous Friday that it had lowered the U.S. credit rating from AAA to AA+. The news rattled Asian and European markets Monday morning and led to a steep sell-off. In the United States, the Dow Jones industrial average fell more than 634 points in Monday trading.

Even in the midst of volatile markets, properly allocated retirement investors are advised to maintain their investment strategy, according to officials at GuideStone Financial Resources, a diversified provider of retirement and other financial products to Southern Baptist and other evangelical churches, colleges, seminaries, hospitals and related institutions.

Although it is always prudent to review one's investments periodically, making changes in volatile markets can lead to emotional mistakes, according to GuideStone officials.

"Our retirement-plan participants should always keep the long-term view first and foremost," said O.S. Hawkins, GuideStone's president. "It's easy to allow disturbing headlines to cloud our judgment. In all times -- but especially times like these -- the important thing is for investors to remain rational, consider their financial goals and to avoid making decisions guided by emotion."

Whether the market is up or down, GuideStone officials point to three key areas that can help investors make decisions about how to handle their investments:

1) Focus on objectives not emotions.

GudeStone retirement-plan participants can access the free GPS: Guided Planning Services* tool both online or by telephone appointment. With GPS, participants can see whether they are properly allocated based on their risk tolerance and investing time horizon -- generally, the time until they'll need to start drawing their retirement accounts down. Tools like GPS can help an investor look at their investments more objectively and make any necessary changes to their account based on facts, not today's headlines.


2) Avoid making impulsive decisions.

Guard against making ad hoc changes in your portfolio. Making changes based on short-term market movements can lead to failure as it promotes "buying high and selling low."

The performance of a retirement investment account in 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.

3) Maintain realistic expectations about market behavior.

Financial markets move up and down over time in response to social, political and economic events. Further, equity investments are by nature more volatile than some other asset classes such as cash and bonds. Equity investors who are properly allocated should be able to accept significant short-term fluctuations in the value of their portfolios.

"We never know what the future holds," Hawkins said. "What we can do is look at history and see that investors who maintained a consistent investment discipline and did not make rash decisions almost always come out better off than those who changed direction every time the economic winds moved."

GuideStone has prepared a panel discussion on retirement during this uncertain economy. Featuring distinguished experts in investments, retirement planning and economics, it can be accessed at For more information on the potential impact of the credit rating downgrade, go to the GuideStone Capital Management website


Roy Hayhurst is the editorial services manager for GuideStone Financial Resources of the Southern Baptist Convention. *GuideStone Advisors is a controlled-affiliate of GuideStone Financial Resources.

GuideStone is a diversified financial services provider offering retirement, insurance investment management, property and casualty coverage, and executive planning products to Southern Baptist and other evangelical churches, colleges, seminaries, hospitals and related institutions.

Copyright (c) 2011 Southern Baptist Convention, Baptist Press


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