IMPORTANT MESSAGE FROM TIAA

Dear TIAA Participant,

The recent volatility in financial markets is top-of-mind for many investors, and we wanted to offer you our perspective on these events.

Throughout our nearly 100-year history, we have seen this type of market volatility many times before, with stock prices falling in anticipation of higher interest rates. In the past, it has not lasted long, and it has typically been a buying opportunity.

In our view, stock prices are falling as markets adjust to a period of somewhat faster economic growth, somewhat higher inflation and a somewhat more hawkish Fed. Those are late-cycle trends, and late cycle has generally been good for stocks.

While inflation expectations have drifted up, so have real interest rates. This equity market correction is less about inflation fears and more about concerns that the Fed will tighten too much or too soon. At this point, markets have priced in close to three Federal Reserve rate hikes in 2018, and another in 2019. More adjustment might be needed, but the bulk of it is behind us.

Ups and downs in the financial markets are not unusual. We have tips for you to consider during times of market volatility in a piece titled “What to do – and what not to do – when markets get shaky.” Highlights of the recommendations to help keep you on track toward your goals include:
• Diversify
• Rebalance periodicallyi
• Don’t try timing the market
• Stay focused on the long term
• Have a rainy-day fund on hand
• Talk with your TIAA advisor
Historically, regardless of the source of volatility, markets have generally proved resilient over longer periods of time. A TIAA advisor can evaluate whether a portfolio is built to weather market storms – or if it needs shoring up so it can continue meeting individual objectives.ii If you have any questions, please contact your TIAA financial advisor. Thank you.

Sincerely,

TIAA