Perhaps you’ve considered moving your retirement investments out of the stock market in order to reinvest at a more opportune time. Maybe you’ve thought about selling off underperforming funds in order to invest in some currently providing higher returns.

These are both examples of what’s called “market timing” or “chasing the market”; and while the theoretical implications are tempting, the real financial consequences can be devastating. Let’s look at a couple of facts to consider:

• No one can predict when the market will go up or down. For example, investors who pulled out of the market following the troubling week of Oct. 6 had no idea that Oct. 13 would yield the largest point gain in the Dow Jones Industrial Average’s history. By trying to time the market, those investors locked in their losses and received no benefit from the history-setting gains.
• Selling low and buying high can be a dangerous game. Consider the tech market boom in the late 1990s. Many investors completely abandoned long-term strategies to purchase more expensive funds-of-the-moment only to find their accounts ravaged when the bubble burst in the early part of this century. It is wise to remember that the hottest performing funds are usually the most volatile, and chasing them can leave you empty-handed.

History certainly testifies that a well-diversified portfolio designed to meet your long-term investment goals can provide resiliency through turbulent markets. And while timing or chasing the market can lead to fast gains, it can also be a quick route to catastrophic losses.

GuideStone’s highest priority is to help our participants reach their retirement goals. Therefore, we strongly urge investors to carefully consider the consequences to their retirement portfolio before making any investment decision, and especially those that carry the same extreme risk as timing or chasing the market.

For any additional questions or concerns you may have, please visit our updated Frequently Asked Questions or call a Customer Relations specialist at 1-888-98-GUIDE (1-888-984-8433).