tag:blogger.com,1999:blog-7609353726565000072.post6448438456745626264..comments2023-06-14T02:29:40.319-07:00Comments on PSPRS Pension Watch: PSPRS investment returns through December 2014Drop Zonehttp://www.blogger.com/profile/07195030344305212432noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7609353726565000072.post-41865083122764569522015-02-21T14:19:32.260-07:002015-02-21T14:19:32.260-07:00Thanks, very informative.Thanks, very informative.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7609353726565000072.post-5145385462925852182015-02-21T10:40:17.715-07:002015-02-21T10:40:17.715-07:00Thank you for your comment. Within the last few y...Thank you for your comment. Within the last few years PSPRS has instituted a more balanced investment strategy. As you are probably aware, risk follows return, so in order to get higher returns you must take more risk. For PSPRS, investing heavily in domestic equities could provide higher returns, but it would also expose them to a lot more risk if the markets head south.<br /><br />The type of risk they are now trying to avoid was seen during the dot.com bust and the 08-09 financial crisis. Right now, US markets are outperforming the rest of the world, but if they tank again, we will really get to see if PSPRS' current investment strategy works. You can see by the July and September 2014 returns that PSPRS' returns, while negative, were not as bad as the Russell 3000's, so the strategy appears to be working as planned: potential gains are foregone in order to reduce risk. This means that PSPRS' positive returns will lag the Russell 3000's positive returns, but they will not be as bad as the Russell 3000's negative returns. However, it is way too early to tell how this will play out long term.<br /><br />For me the more depressing thing is that if PSPRS stands at 1.0% year-to-date return at the end of February, my calculations show that they will have to average about 1.65% each month for the four remaining months of the fiscal year just to reach the expected rate of return of 7.85%. This compares to earning a monthly average of only 0.64% over the 12-months of the fiscal year. Thank you again for your comment.Drop Zonehttps://www.blogger.com/profile/07195030344305212432noreply@blogger.comtag:blogger.com,1999:blog-7609353726565000072.post-22787641493700953192015-02-20T15:54:34.736-07:002015-02-20T15:54:34.736-07:00Why do you think PSPRS is always under-performing ...Why do you think PSPRS is always under-performing as compared to the Russell 3000?Anonymousnoreply@blogger.com