By Rodric E. Cummins, CFA, Senior Vice President and Chief Investment Officer

Global equity markets posted a strong, albeit volatile, rally during the third quarter. The quarter ended on an upbeat note with investors encouraged by the latest economic data and signals from the Federal Reserve that they stand ready with further quantitative easing, if needed, to keep the U.S. economy from a double-dip recession. In sharp contrast to the previous quarter, equity markets, as represented by the S&P 500® Index, responded with the strongest September rally in more than 70 years, virtually erasing the deep stock market losses from the second quarter.

Despite improving corporate earnings and balance sheets, the U.S. economy continues on a path of moderate growth that is well below past recovery levels and well below resource capacity. For the past two quarters, the Federal Reserve has tested the ability of the U.S. economy to sustain, on its own, the growth trajectory started in 2009 by massive government stimulus. At these low interest rate levels, the possible need for the Federal Reserve to resume quantitative easing techniques, points to the reality that this economic recovery is burdened with serious challenges carrying forth from the financial crisis of 2008. Most notably, the consumer, representing the largest segment of the economy, has been unwilling, and in many cases unable, to resume previous spending patterns under the heavy weight of personal debt and concerns about lack of job growth. Market volatility will likely continue to be the theme for 2010 as investors' attitudes toward risk assets ebb and flow in response to the sea of government policy actions, mid-term elections, and mixed economic data releases, all of which paint an unclear picture of future economic growth.

You should carefully consider the investment objectives, risks, charges and expenses of GuideStone Funds before investing. For a copy of the prospectus with this and other information about the funds, please call 1-888-98-GUIDE (1-888-984-8433) or download a prospectus. You should read the prospectus carefully before investing.

S&P 500® is a trademark of The McGraw-Hill Companies and has been licensed for use by GuideStone Funds. The Equity Index Fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s and Standard & Poor’s makes no representation regarding the advisability of purchasing the Equity Index Fund.

All indices are unmanaged and not available for direct investment. Index performance assumes no taxes, transaction costs, fees or expenses. This update is prepared for general information only and it is not to be reproduced.

GuideStone Funds shares are distributed by BNY Mellon Distributors Inc., a registered broker-dealer and underwriter of the funds, 760 Moore Road, King of Prussia, PA 19406. GuideStone Capital Management, a controlled affiliate of GuideStone Financial Resources, serves as the investment adviser to GuideStone Funds.