What is your response to the market fears and volatility?
As the trustee of your retirement plan I always struggle in these times of high volatility with how much and what to say to those of you who have entrusted the Church Benefits Board (CBB) with your investments. With the high volume of messages out there I do not want to be a contributor to the hype and hysteria.
Many of you have heard me say that anyone who tells you they know what the market is going to do is not being honest, and this week if you waited a day, those “experts” would probably have been wrong.
Also with the dysfunction of congress, the mixed signals of the European central bank and weak economic indicators, there certainly is information available to project a gloomy or fearful outlook.
However, history has taught us that not making quick reactions to the volatility of the market has served most long-term investors well. In most years only a few days in the market can have a major impact on your annual return. The problem is that we do not know when those days will occur.
Some of you who are baby boomers like me might be thinking “My time is getting short … does that still apply to me?” Well, by some estimates if you are retiring at age 65 this week, you have a 5 percent chance that you will live to be 100. That gives most of us a pretty long outlook.
The bottom line for me is many people still feel like things are improving, despite all of the wrangling by governments here and overseas. Many people are comparing this recent volatility to 2008, which was the first time in a long time a stock market crisis drove the economy. I believe – and there’s good evidence to support that belief – that a returning recession is more at risk because of fear and panic than any other factor.
My conviction is that for people of faith, whose fear is of the Lord and whose hope is in His return, we need to stay steadfast and be good stewards of what the Lord has entrusted to us and not be contributors to the emotional fears created by others through media sound bites.
Gary Skeen, President, Church Benefits Board