The sudden ricochet in the stock market earlier this year brought back to mind my first visit to Disneyland that included “Mr. Toad’s Wild Ride.” While the amusement park attraction had my “stomach in my throat” for only 2 minutes, the market plunge this past April took 30 days to come back to its previous level. For investors, this can seem like an eternity.
So what’s the best move in times like this? Usually, it’s to sit tight.
When you utilize our Life Funds® (known in some circles as “target-date funds,” or “age-based funds”) you utilize a safer, “set it and forget it” approach; you invest in a fund that closely matches your age, and your dollars are allocated across a variety of investments, a balance of conservative and aggressive. Each year as you move toward retirement, your funds are reallocated gradually to be invested more conservatively, and market swings have diminishing impact on your overall investment portfolio.
You’re not boxed in, though. You do not have to invest specifically in your age-bracketed fund. Want to be a little more aggressive? Choose a fund younger than your age. Want to be cautious? Choose one a little older. The choice is yours.
In the midst of a market downturn, even though our initial reaction may be to move our savings to a safer place to “protect” what is left, doing so can leave us even more “high and dry” as we miss the upswings that historically follow a downturn. We only lose when we sell (or move) our funds during a downturn. Emotions should never guide our decisions in investing, especially when the markets are volatile. Consider the great investor-guru, Warren Buffet: one of his trademarks has been to not sell-off when markets dip (if anything, he says, “buy more!”), and it has paid off for those who invested with his company: $1,000 invested in Berkshire Hathaway in 1965 grew to $55 million in 2024!
The next time the market dips and you start fretting in uncertainty, remember at the end of the dark, scary ride with Mr. Toad, everyone steps back out into the warm sunshine and fresh air. It will all be ok. As I write this article, the S&P 500 is up 14% above April 1... the day before the plunge. The lesson? Stay on the ride. Had I sold then, I would have missed out on that gain. History continues to tell us, it will be ok... just sit tight!
Rev. David Boots, Director of Member Relations, Western Region
Rev. David Boots serves as the Servant Solutions Director of Member Relations for the Western Region. He brings his experience and knowledge of 35 years of vocational church ministry, having served three large congregations of the Church of God full time as Executive Pastor, overseeing operations, administration and finance. He has also served those congregations at times as Worship Pastor.