By BBT on February 27, 2020
The news these past few weeks has been full of breaking stories on the new coronavirus COVID-19. And we are now seeing the impact this outbreak is having on the global markets, with ours being no exception. It’s natural to be anxious about what’s happening. The steep and sudden drop in the markets has jostled the confidence of investors and generated questions about whether this is a significant market turn or a blip in a very long bull market.
We want you to know that BBT is paying attention. As the administrator of your pension plan, we are keenly aware of volatility in the market and understand that it makes our members anxious. Growth is the key ingredient to making investments pay off in retirement, and when growth is threatened, it’s easy to feel that your future is at risk.
So here are some important points to keep in mind —
In light of recent market volatility, remember that your retirement plan is intended for long-term investment. Attempts to time the market are rarely successful. One way to manage risk over time is to ensure you have a diversified portfolio that is rebalanced through up-and-down markets. Keep your individual needs, goals and time horizon in mind and consult with your financial adviser if needed. It is important to note diversification and rebalancing do not ensure a profit and do not protect against loss in declining markets.
When the market is in turmoil, it is not time to make a move. Rather, stay the course with your financial plan. Data suggest that it is better to keep funds fully invested rather than try to guess the timing of the market in anticipation of corrections and subsequent recoveries.
Please know that we are in communication with our investment managers and they are watching the markets closely. That’s their job. Without exception, they indicate —
- that they are actively engaged in managing assets with the best interests of Pension Plan members in mind, fully considering the various forces, including COVID-19, that are influencing performance;
- that markets typically do not respond well to uncertainty and so the current market turmoil is not surprising, given that the ultimate impact of COVID-19 is not yet known; and
- that they are not changing their portfolios at this time due to the market volatility.
History shows that equity market impact from past health crises has proven to be a non-event in the long run, and although we have no way of knowing the future, so far reports indicate that the market is in line with historical trends. Everyone is going through the same thing right now. We hope you will stay the course, and stick to your plan.
Our staff, investment managers, and investment counsel are committed to serving the interests of our members. We are focused on the issue and are managing portfolio response based on the best information to date.
BBT staff cannot give investment advice, if you just want to talk to someone about your retirement savings investments, and you don’t currently have a financial adviser, you might be well served to seek options available through our partnership with Financial Engines. You can reach them at (888) 597-0060. Our intent is to make you aware of this service — not to use this market volatility to promote business. Financial Engines does offer some services free of charge, so we encourage you to look into this if you feel it will be helpful to you.
Lynnae Rodeffer
Director of Employee Benefits