May your eyes look forward and your gaze be straight before you. May the path of your foot be balanced and all your ways be sure. Do not swerve right or left; remove your foot from evil.

Proverbs 4:25-27

Stay the Course

As nearly everyone knows, the markets are down. Moreover, an economic recession looms. In such a volatile environment, many who invest with UMF want to take some kind of action – any action – in hopes of preserving the value of their investments. But let me encourage you to put a hold on such decisions.

There’s a cost to Timing the Market

There’s an investing adage: “Time in the market beats timing the market.” It’s tempting to want to pull your funds from UMF when the market is down, but in so doing, the losses you fear become real. The goal is to buy low and sell high. Not the opposite. Savvy investors know that buying high and selling low is a recipe for going broke.

More specifically, by trying to miss the market’s “bad” days, most investors miss the market’s  “best” days. Successfully timing the market involves getting two nearly impossible decisions right – namely, when to sell and when to get back in. The only sure-fire way to capture a recovery is to stay invested.

UMF has a plan

Part of the Foundation’s job is to stay true to our Investment Policy Statements. These policies specifically define our investing goals, our risk tolerance, as well as the types of sound investments that can be made. A great deal of scholarly work went into the creation and approval by UMF’s Board of Directors of our Investment Policy Statements. These policies serve as a guide star for the way we invest the funds you’ve placed at UMF. By following the investment principles outlined in the Investment Policy Statements, UMF’s funds have produced stellar results over a long period of time. For example, UMF’s Balanced Fund has produced an average annual return of over 8.5% for the last 30 years. All this despite the various market declines over the years, especially 2008. Those who pulled their funds in 2008 realized steep losses. Those who left their funds at UMF recovered all those losses by the end of 2009.

So what’s the lesson here? Stay the course. The down market we’re experiencing now will recover in the future. Do not “sell low.”

UMF is Changing Investment Advisors

For over two decades, UMF has partnered with Morgan Stanley and Graystone Consulting to manage UMF’s pooled investments. After careful consideration, a year-long investigative search, UMF’s Board of Directors voted to change our investment advisor from MS-Graystone to SEI Institutional Group. We’re excited to announce this change as we begin a new journey with SEI.

An additional change we’re excited about is a move to an Outsourced Chief Investment Officer (OCIO). UMF’s past practice included our Investment Committee meeting quarterly to hear recommendations from the Investment Advisor and make changes if necessary.

Under the new OCIO model, SEI will have the authority to make changes to the portfolio (within the parameters defined in our Investment Policy Statements) between the quarterly meetings with the goal of capturing more of the upside of the market. What does this mean for you? Hopefully, better returns.

Staying focused on the Long Term

Navigating through uncertain markets is not a fun exercise. But it needn’t be a frightening one either. Remember, as you hear calls to pull your invested funds from UMF, it’s important to remain calm and focus on the long term. In so doing you’re being a good steward of all that God has placed in your hands.

Rich Bowlin
Chief Executive Officer
United Methodist Foundation, Inc.

This article is written by Rich Bowlin, CEO of the United Methodist Foundation, Inc. If you would like more information regarding UMF, you can contact Rich at [email protected].