More on public pension funds from the weekend’s WSJ.
Our point here is not that buying dips is to be totally avoided. Due diligence are far as we know is still allowed.
But the idea that overvalued stocks, bonds or whatever will always recover to their highest traded perch, a common mistake latent in many inventor psyches, can get one into much trouble.
We think it is equally important to keep track of your pension fund a bit more closely since all that we’ve experienced since the pandemic.
No doubt many do and will continue to try to paint healthy skepticism as fostering distrust. So you can expect plenty of attacks.
But we will say it and we will say it long and loud. Healthy skepticism is at t premium today. It you don’t have any, get some especially when it comes to bureaucrats and governments.
“Among the investors who bet on cryptocurrency over the past year are pension funds that manage public workers’ retirement savings. Now those funds are navigating the crash. Pension Funds And Bitcoins.
A Quebec pension fund made a $150 million equity investment in Celsius Network LLC last fall. In July, the cryptocurrency lender filed for bankruptcy protection.
A $5 billion retirement fund serving Houston firefighters said last October it had put $25 million into bitcoin and ether. Since that announcement, both cryptocurrencies have fallen by more than 50%.
“Of course we would have preferred otherwise,” Houston Firefighters’ Relief and Retirement Fund investment chief Ajit Singh said in an email. But “volatility and large swings are expected.”
“Public pension funds have increasingly ventured into less-traditional assets during the past two decades in response to low fixed-income yields. Unable to rely on bond returns to hit aggressive 7% investment return targets and pay trillions of dollars in promised benefits, retirement officials have invested in private equity, real estate and even forestland.
“Over the past few years, as crypto investments boomed alongside stocks during the stimulus-fueled economic recovery, some retirement-fund managers and advisers saw opportunity.