Plan Accordingly

August 20, 2018
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Despite the recent stock market gains (one of the longest bull markets in history), large public pension plans still face a funding shortfall of $4 trillion because their liabilities are so large, according to Moody’s Investors Service.

They have just 70% of what they need to pay future benefits to police, firefighters, teachers and other public workers, according to 2016 figures from Wilshire Consulting.

Even if pensions had put their money into a traditional 60/40 portfolio at the end of 2008, it wouldn’t have made much difference to their funding status.

They would have had to time the bottom exactly right and invested ALL assets into stocks, in order to make up this short-fall.


In reality thought, while a 100% stock portfolio would be successful, it would be politically unpalatable as during bear markets your local politicians and plan participants would be furious (see the bear markets of 2000-2002 and 2007-2009)!

These public plans continue to be underfunded, under invested and under supported.


Stay Tuned, Disciplined & Patient! {TJM}

The Investor & Character Equation (ICE) | S + R = O


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