The market has been experiencing some volatility lately, with the DOW recently dropping about 800 points. When this happens, it is disconcerting to investors, both those with a long-time horizon and those with a short one. Particularly to those with a short time horizon.
When it comes to your employee’s retirement plan, it is important that we keep their horizon in mind when discussing any moves that should or should not be made in light of a market correction. Often looking at market moves in this context helps to calm investors down and make fact-based choices vs. emotional ones.
What is causing this current downward move in the market? Certainly, the ramped-up trade war with China has impacted the way the market is looking to the future as well as global unrest, the yield curve and political turmoil here at home. However, corporate earnings and employment remain strong, wages are rising, and the Fed seems to not be over reacting. All of this should help the economy and hopefully soften any correction. With all of this said, the market has had a strong year and corrections are a part of the natural cycle of market growth. Some market pundits believe that volatility and the China trade issues may continue to the next election.
We will continue to monitor your plans investment line up and watch for any signs of trouble. As retirement plan advisors, our goal is to provide you and your employees with the tools and investments to succeed over a long-term, and as such, we search for quality and consistency when providing investment options. By providing a well-diversified line up and the appropriate asset allocation/target date funds, we strive to give you and your employees the tools to save towards a successful future.