The recent drop in the market following a (very) long growth run can leave even the most experienced investors feeling a bit nervous.
What do you do when the market drops?
First, don’t panic. Market volatility is normal and expected.
Second, keep perspective. In the case of the most recent drop, the fundamentals of the economy remain strong. We don’t see leading economic indicators that suggest areas of concern for the economy. For example, unemployment rates remain very low and the economy is close to full employment. In addition, the vast majority of the economy is related to consumer activity, which remains robust and we hope will stay that way given good employment numbers and wage growth.
Third, go back to basics. Remember the fundamentals of investing.
Keep an eye on your horizon — Stick to your game plan and invest for the long term to reach your goals. For sustainable investors, environmental progress and corporate growth don’t necessarily happen overnight. Give yourself time to achieve your goals.
Diversify — It is important to invest across asset classes, investment styles, company size (known as market capitalizations) and geography in order to spread risk and gain access to growing markets.
Review and adjust — Experts recommend reviewing your portfolio periodically to see if you need to re-balance or re-establish the asset allocation you want. Simplifying your investments may help you stay on track. Tools like dollar-cost averaging (buying more shares when stocks are lower; fewer when stocks are more expensive) may also help market changes work more in your favor.*
Go green – While not immune to market fluctuations, sustainable investing may reduce risk and offer financial advantages by incorporating ESG (Environmental, Social and Governance) performance. Green Century believes that companies that protect the environment may be more profitable in the long run by avoiding risks, being prepared for changing regulations and growing through maximizing competitive advantages. Continue to align your investments with your values by investing in responsibly screened, broadly diversified and fossil fuel free investments.
During times of dramatic change in the markets, it is normal for investors to feel anxious. Refocus by remembering your goals and returning to the basics.
*Investment strategies such as dollar-cost averaging do not ensure a profit and cannot protect against losses in a falling market.
You should carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please click here, email [email protected], or call 1-800-934-7336. Please read the Prospectus carefully before investing.
Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region, or market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to risks including interest rate, credit, and inflation. The Funds’ environmental criteria limit the investments available to the Funds compared to mutual funds that do not use environmental criteria. A sustainable investment strategy which incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria.
This information has been prepared from sources believed reliable. The views expressed are as of the date of publication and are those of the Advisor to the Funds.
The Green Century Funds are distributed by UMB Distribution Services, LLC. 3/18