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Navigating Market Corrections: Insights and Strategies for FMC Employees

While market fluctuations can be unsettling, FMC employees, like all investors, benefit from maintaining a disciplined long-term strategy, as historical trends show that markets tend to recover after downturns, emphasizing the value of resilience and steady planning. – Kevin Landis, a representative of The Retirement Group, a division of Wealth Enhancement Group.

FMC employees should remember that while market corrections can create short-term uncertainty, sticking to a consistent investment strategy and focusing on long-term goals often leads to recovery and growth, as historical data demonstrates the resilience of markets over time. – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

Recent S&P 500 market corrections and historical patterns of volatility.
Strategic long-term investment approaches during market downturns.
Guidance for investors, including those nearing retirement from FMC.

The latest variations in the S&P 500® Index, which saw a decline of as much as 10% from its peak, mean a market correction typically driven by changing financial scenarios. This particular fall, which happened only a month after the index reached new highs, highlights the natural volatility contained in financial markets. Market corrections are common; historic data after 1980 demonstrates 93% of the years have seen a minimum of 5% decline in the S&P 500, with 47% experiencing a drop of 10% or more—illustrating exactly how often such events are observed in the investment community.

Economic indicators, such as declining consumer confidence and employment outlooks, together with an increase in layoffs, have raised concern among investors. Naveen Malwal, an institutional portfolio manager at Strategic Advisers, LLC, notes that although markets face short-term setbacks, they have historically proven the capability to rebound as time passes.

Market Recovery and Historical Insights

Over recent years, the S&P 500 has published an average annual return of 13.3%, reflecting how markets have tended to recover after downturns. This particular extended trend helps investors better comprehend that recovery phases typically follow times of decline, sometimes within 12 months.

Data from Fidelity Investments and Bloomberg Finance L.P., as of December 31, 2024, also show that the majority of major market dips are followed by important recoveries. This reinforces the idea that downturns, while impactful, are usually temporary in the context of long-range investing.

Understanding Market Corrections

It's tough to forecast the timing and extent of market corrections as a result of the number of financial variables involved. Nevertheless, historical trends suggest that markets usually recover in a somewhat short timeframe. For instance, the S&P 500 has experienced an average yearly decline of 14% after 1980 but has normally ended the entire year with gains, including dividends.

Strategic Long-Term Investment Approaches

Keeping a long-term view is important during times of uncertainty. Investors are urged to maintain focus on their goals, even when short-term fluctuations make markets appear to be unstable. Malwal notes that the continued development in company earnings—up 14% in the most current quarter and likely to boost throughout 2025—could help support the broader upward trend of the stock market.

Advice for Investors and FMC Retirees

During times of market stress, it is beneficial to stick with your investment approach instead of making abrupt changes. For people nearing retirement at FMC companies, it could be a good idea to look at strategies for controlling market exposure, like dollar-cost averaging. This method involves constantly committing a fixed dollar amount, which might lessen the effect of improperly timed trades and allow buying more shares when prices are low—potentially benefiting from a recovery.

Conclusion

While no one can reliably anticipate just how long a market correction is going to last, the design of fairly rapid recoveries seen throughout history can provide perspective. By understanding the dynamics of market moves and sticking to a disciplined investment approach, people are able to work toward maintaining progress toward their financial goals. Aligning investment choices with both long-term goals and the present financial environment might help limit the impact of market volatility as time passes.

By comparing the challenge of a market correction to navigating a sudden, intense storm, it becomes clear that—like seasoned sailors—investors may benefit from staying the course rather than making hasty changes. Trusting in innovative planning and the historic resilience of markets can assist people in riding out turbulent times and looking forward to calmer, more rewarding times.

Allow me to share five special sources of energy from various reputable publications that help support the article's information. Each entry contains the publication, author, date, and referenced content, together with a description of how it benefits retirees:

Articles you may find interesting:

Sources:

1. Q.ai – a Forbes BrandVoice Contributor. What Is a Market Correction and Should Investors Be Worried? Forbes , 26 Feb. 2024, https://www.forbes.com/sites/qai/2024/02/26/what-is-a-market-correction-and-should-investors-be-worried/ .

2. Sonenshine, Jacob. The S&P 500 Has Had a Big Run. How to Play It From Here. Barron’s , 1 Mar. 2024, https://www.barrons.com/articles/sp-500-stock-market-investment-tips-45cfe5f0 .

3. Reuters Staff. S&P 500 Eyes Weekly Loss as Earnings Dampen Sentiment. Reuters , 23 Feb. 2024, https://www.reuters.com/markets/us/sp-500-eyes-weekly-loss-earnings-dampen-sentiment-2024-02-23/ .

4. Benz, Christine. How Retirees Can Survive Market Downturns. Morningstar , 11 Oct. 2023, https://www.morningstar.com/retirement/how-retirees-can-survive-market-downturns .

5. Dickler, Jessica. Here’s How Dollar-Cost Averaging Can Help You Save More Money. CNBC , 4 Dec. 2023, https://www.cnbc.com/2023/12/04/heres-how-dollar-cost-averaging-can-help-you-save-more-money.html .

How does FMC Technologies plan to manage the investment strategy of its pension plan to ensure it remains solvent and able to meet the benefit payments as employees retire? Given the shifting dynamics of the market, what specific measures is FMC Technologies employing to enhance the liquidity of its assets and mitigate risks associated with underfunding in the current economic climate?

Investment Strategy for Solvency and Benefit Payments: FMC Technologies' pension plan aims to ensure all benefit payments are met as they fall due. The investment strategy includes maintaining funds above the Statutory Funding Objective and transitioning towards lower-risk assets such as Liability Driven Investments (LDI), gilts, and cash. This strategy, driven by advice from LCP, seeks to reduce underfunding risks and ensure liquidity(FMC_Technologies_Pensio…).

In what ways does FMC Technologies incorporate environmental, social, and governance (ESG) factors into its investment decision-making for the pension plan? How does the commitment to ESG investing align with the broader goals of FMC Technologies, and what impact does it have on the long-term sustainability and performance of the company's pension investments?

ESG Factors in Investment Decisions: ESG factors, including climate change, are considered by FMC Technologies in investment decisions. The company encourages investment managers to integrate ESG considerations into their analysis of future performance and risks. ESG aligns with the long-term sustainability of the pension plan, though there are limited opportunities to apply ESG in the current target investment strategy of LDI, gilts, and cash(FMC_Technologies_Pensio…).

Can you elaborate on the additional voluntary contribution (AVC) arrangements available through FMC Technologies and how they are designed to support employees in building a more robust retirement income? What choices do employees have within these AVC options, and how can they tailor their investment to suit their individual risk profiles?

Additional Voluntary Contributions (AVC): FMC Technologies provides AVC arrangements designed to offer a range of investment options to help employees build a more robust retirement income. These options allow employees to tailor investments based on their risk-return preferences, ensuring flexibility in achieving personal retirement goals(FMC_Technologies_Pensio…).

As employees of FMC Technologies approach retirement, what processes are in place to evaluate their pension benefits and determine eligibility for various retirement options? What role does the pension plan's advisory team play in assisting employees with financial planning in preparation for retirement?

Pension Benefits Evaluation Process: FMC Technologies uses a structured process to evaluate pension benefits, supported by investment advisers and trustees. This process involves regularly reviewing the funding level and the benefit cash flows to ensure the pension plan is on track to meet employee retirement needs. Advisory teams help employees with financial planning during the transition to retirement(FMC_Technologies_Pensio…).

What steps is FMC Technologies taking to transition its investment strategy towards greater exposure to low-risk instruments while still aiming for satisfactory returns? How does this transition align with the companyâ€™s funding objectives, and what are the anticipated benefits for the employees in the context of their retirement planning?

Transition to Low-Risk Investments: FMC Technologies has transitioned much of its pension assets into LDI, gilts, and cash to de-risk the investment portfolio. This shift aligns with the company's funding objectives to secure pension liabilities and provide stable returns for retirees. The plan is expected to fully transition to these low-risk instruments to support long-term pension solvency(FMC_Technologies_Pensio…).

How does FMC Technologies measure the performance of its investment managers, and what criteria are used to evaluate their effectiveness in managing the pension plan's assets? In the event that an investment manager does not perform according to expectations, what procedures are in place for FMC Technologies to reassess and possibly reallocate those funds?

Investment Manager Performance: FMC Technologies evaluates the performance of its investment managers using various criteria, including their ability to meet long-term pension objectives. If an investment manager underperforms, FMC Technologies, with advice from LCP, reassesses and rebalances the portfolio as needed to ensure pension assets are properly managed(FMC_Technologies_Pensio…).

What communication channels does FMC Technologies recommend employees use if they have questions or need clarification regarding their retirement benefits and the pension plan? How can employees easily access additional resources or support to better understand their retirement options as they transition out of active employment?

Communication Channels for Retirement Benefits: Employees of FMC Technologies can access information and support regarding their pension and retirement benefits through direct communication with trustees and the pension advisory team. FMC Technologies recommends utilizing these resources for clarity on retirement options and to understand the transition out of active employment(FMC_Technologies_Pensio…).

Considering the implications of portfolio diversification, how does FMC Technologies determine the appropriate asset allocation for its pension plan's investment strategy? What considerations are taken into account to ensure that all employeesâ€™ retirement savings are managed in a way that balances risk and growth potential?

Asset Allocation and Portfolio Diversification: FMC Technologies’ pension plan employs a diversified asset allocation strategy, ensuring a balance between growth and risk. The investment strategy considers the need to match liabilities with assets while progressively reducing exposure to high-risk assets like equities and increasing exposure to low-risk instruments like LDI and gilts(FMC_Technologies_Pensio…).

How does FMC Technologies plan to maintain compliance with regulatory requirements regarding its pension plan, particularly concerning employer-related investments? What are the limitations or restrictions imposed by legislation that affect how FMC Technologies can manage its pension fund assets?

Compliance with Regulatory Requirements: FMC Technologies remains compliant with regulations regarding employer-related investments. Restrictions under the Pensions Act 1995 and the Occupational Pension Schemes (Investment) Regulations 2005 prevent significant investments in TechnipFMC or associated companies to avoid conflicts of interest(FMC_Technologies_Pensio…).

As risks associated with market fluctuations continue to evolve, how does FMC Technologies plan to adjust its investment strategy to mitigate these risks? What safeguards are put in place to protect retirement benefits during periods of economic uncertainty, and how will these strategies affect the financial well-being of FMC Technologiesâ€™ retirees?

Adjusting Investment Strategy for Market Risks: FMC Technologies employs a liability-driven approach to manage the pension fund, mitigating market risks associated with economic fluctuations. Regular reviews of the investment strategy, alongside professional advice, allow the company to adjust and protect the pension plan's assets during uncertain market conditions(FMC_Technologies_Pensio…).