GuideStone Financial Resources launched a new video series in late January, Conversations with GuideStone, offering insights for investors about current events. In the first of the periodic videos, GuideStone Chief Strategic Investment Officer and GuideStone Capital Management, LLC, President David S. Spika discussed proposals from the Trump White House that would likely help markets.
The video is available online at GuideStone.org/Conversations.
"The positive aspects of the Trump administration are expected to be higher economic stimulus," Spika said. "That would include pro-growth tax policies, pro-growth regulatory policies, things that will encourage investors and institutions to spend more. Institutions and individuals don’t spend if they're not confident. These sorts of policies should improve confidence, should increase spending, and that will drive economic growth and will drive the market higher over time."
A significant question for all investors is the speed with which the policies can and will be implemented.
"The market had a significant rally post-election, and what it was pricing in was the best-case scenario for all of these pro-growth policies occurring," Spika said. "To the extent that they don't and they don't occur as timely as the market would expect, there's likely to be some volatility. Our belief is that it's very unlikely that everything gets passed as quickly or as fully as the market expects."
Spika noted rising interest rates, which the Federal Reserve has indicated will happen throughout 2017, will also have an impact on investors.
GuideStone Financial Resources President O.S. Hawkins indicated that the video is one resource to assist investors and retirement plan participants in their understanding of the markets and the way they respond to current events. For retirement plan participants, however, efforts to try to time the market may undermine their long-term financial strategies.
"The performance of your retirement account is based on results of the financial markets in the future, not in the past," Hawkins said. "GuideStone offers this information to help educate our participants and investors about the factors that cause the cyclical nature of the markets. It’s important though, whatever the headlines and emotions of the moment, to remember that the markets have historically rewarded those with long-term perspectives."