DALLAS (BP) — Recent stock market volatility shouldn’t alarm long-term investors, GuideStone Financial Resources Chief Strategic Investment Officer David S. Spika said.
The market — which has seen more than half of this year experience moves of 1 percent or more — is healthy, and though the headlines can be unnerving, there is no need to make tactical changes to properly invested and diversified portfolios.
Spika’s comments came during the second annual GuideStone Employee Benefits Summit, a gathering of key ministry decision makers, human resources professionals and financial officers of churches and ministries. The meeting was held March 26–28 in Dallas. This year’s event brought 200 attendees from around the country.
Spika titled his presentation “The Return of Interesting Markets.”
“President Donald Trump is keeping a campaign promise to impose tariffs on nations that have an unfair trade advantage versus the United States, specifically China,” Spika noted during his presentation. “The stock market has reacted negatively to talk of tariffs because they have the potential to negatively impact U.S. economic growth and create higher inflation. However, a prime objective is to prevent the Chinese from acquiring key U.S. technologies.
“When combined with the specter of rising interest rates, the potential for a new Federal Reserve chairman to make a policy error, and the ongoing political upheaval in Washington, it creates uncertainty, which leads to volatility.”
Other Summit sessions included employment law updates from noted attorney Gayla Crain and tax law updates from Michael Batts, a CPA from Orlando with expertise in churches and ministries. Other sessions covered churches and ministries surviving upheavals, cybersecurity, and addressing and preventing sexual abuse within the church.
Spika’s session on the market was a key session during the Summit. He said the market, specifically key measures such as interest rates and volatility, is normalizing in 2018 after a tremendous and historic run in 2017.
“This is not a sign of a pending bear market or a recession,” Spika said. “The recent volatility spike has simply taken us back to 20-year averages, presenting a better landscape for active managers, like GuideStone, to generate excess returns on behalf of their investors.”