Long-term investors should focus on goals, not headlines

DALLAS 

Global financial markets responded with steep sell-offs in the wake of this week’s tariff news announced by the White House on Wednesday. While the news was not unexpected, and markets had anticipated the tariffs, the less-expected magnitude of the announced tariffs sent global markets down in Thursday trading.

While the wall-to-wall coverage can unnerve investors, retirement investors should focus on their long-term goals and time horizon and not make decisions based on short-term headlines.

“The markets, in general, are digesting a tremendous amount of news — the tariffs, stubbornly higher inflation and eroding consumer confidence, which has trended down a fourth consecutive month,” said Brandon Pizzurro, chief investment officer at GuideStone^®. “These headlines are a lot to digest, and markets are responding accordingly. That said, retirement investors should continue to keep a long-term view in mind and realize that these short-term market moves, while unnerving for many, are not uncommon and a generally healthy rotation on the back of two consecutive 20%-plus years for the S&P 500^®.”

“Historically, markets have rewarded those who have kept their long-term objectives in focus.”

While fears of a recession are being discussed, Pizzurro noted that the U.S. government’s most recent fourth-quarter GDP estimate showed the economy grew at a 2.4% annual rate, higher than initial estimates but lower than the third quarter’s 3.1% growth rate. Recessions are not uncommon; the most recent U.S. recession occurred during the initial days of the COVID-19 outbreak and lasted only two months. Furthermore, since 1980, there have been 25 calendar years in which the S&P 500^® experienced a drawdown of 10% or greater, but in 60% of those instances, the total return for the year ended in positive territory. 

“Markets are cyclical,” said Jeff Robinson, director of GuideStone Advisors. “This highlights the importance of planning so that wise investors should look at their goals, assure their investment allocation is appropriate given their age and risk tolerance, and continue investing during periods of volatility. Diversification, a monthly investment plan (commonly referred to as dollar-cost averaging) and a long-term strategy are essential in any market environment, but especially during times like these.”

Investors can expect more volatility in the coming days, Pizzurro said.

“As faith-based investors, we’re not immune to the emotions that come during periods of uncertainty,” Pizzurro said, “but we encourage our members to approach their financial decisions with both wisdom and patience.”

GuideStone members and ministry partners with questions can reach out to GuideStone at 1-888-98-GUIDE (1-888-984-8433).

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Roy Hayhurst is the executive communications director at GuideStone.

This information is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities and does not represent any GuideStone product. The information is not intended to be used as a general guide to investing, or as a source of any specific investment recommendations and does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client. This is not an implied or express recommendation concerning the manner in which any client’s account should or would be handled, as appropriate investment strategies depend upon each client’s individual preferences and circumstances. There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including potential loss of principal.

GuideStone Advisors, an SEC Registered Investment Adviser, is a controlled affiliate of GuideStone Financial Resources. For more information about the firm, products and services, please review the GuideStone Affiliate Form CRS https://www.guidestone.org/-/media/Funds/files/pdf/Affiliated_Form_CRS.ashx.

Media Contact
Roy Hayhurst
Director of Executive Communications
GuideStone^®
Roy.Hayhurst@GuideStone.org | (214) 720-2141