scobienz wrote: ↑Mon Jun 22, 2020 12:00 pm
Yet again, you demonstrate a complete lack of understanding of the financial world. At this point I don’t know whether that is lazy use of terminology or a deeper ignorance. I’ll give you the benefit of the doubt for now.
Your question is meaningless. A pension fund doesn’t ‘earn revenue’.
No reply I see. Then it's a cut and paste job for you, wooly long socks.
Pension Fund
Investment Mandates
ERISA does not regulate a pension plan’s specific investments. ERISA does require plan sponsors to operate as fiduciaries. No conflicts of interest between plans and any people or entities related to the fiduciaries are allowed. Investments are to be both prudent and diversified in a manner that is intended to prevent significant losses.
Pension plans themselves do set mandates as to projected average rates of returns. The higher the projected rate of return, the less money that the employer must place in the plan. The 7.5% rate used by CalPERS is a normal benchmark.
Unfortunately, between the financial crisis and volatile markets, most plans are missing investment mandates. Many private and public pension funds are significantly underfunded, requiring plan sponsors to add additional capital.
Investment Style
The key to investment style is for the fiduciary responsibility to be
prudent and diversified. The traditional investment strategy splits assets between fixed-income investments, such as
bonds and equity investments, such as blue-chip dividend stocks, preferred stocks, and commercial real estate. Many pension funds have given up active stock portfolio management and only invest in index funds.
An emerging trend is to place some assets in alternative investments in search of higher returns. These alternative investments include private equity, hedge funds, commodities, derivatives, and high-yield bonds.
So, let's see.. Blue chip stocks? the market is slightly out of wack re p/e and the Buffet Indicator
Commercial real estate? Looks like it's in for a downturn, as is housing globally.
Bonds? yeah nice one. Good luck with that.
Equity investments? If they buy gold.. maybe, but then the whole system has to crash to get a decent return.
Hedge funds? Well, if your pension wasn't leveraged before, it is now.
Derivatives? Did he say derivatives? Lol
High-yield bonds. Hahahaha
You can see why Tudor Jones is buying Bitcoin...
Good luck