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A Plan to Stop the Pension Plan Rip-Off

March 16, 2016 Comments (0)

Via Huff Po.A Plan to Stop the Pension Plan Rip-Off Quote: There's big money to be made from "advising" these plans. A study from The Maryland Public Policy Institute looked at data from 33 state pension funds. In last fiscal year they examined, researchers found these pension funds paid collective fees of $6 billion!The Wall Street firms that collected these fees touted their ability to pick stocks and bonds that would "outperform a given section of the stock or bond market." They...

Why I am supporting Ron Elmer for Treasurer

February 2, 2016 Comments (0)

Ron Elmer is running for the democratic nomination for the NC Treasurer.   Ron Elmer is highly qualified for the job.  Here's why: He has extensive investment management experience managing institutional mutual funds and index funds.  He's even managed index funds for the State Pension Fund.He's very well qualified.  An NYU MBA, a CFA and a CPA.   He's not a career politician - he doesn't want to use the Treasurer's office to climb the political ladder.He's a...

The short termism myth

January 7, 2016 Comments (0)

Nice summary of why US financial markets are probably not myopic. HT: Newmark's Door.

How do we know that the market is going to open "up" (or "down")?

August 26, 2015 Comments (0)

This is a pretty basic question that most finance folks will know the answer to.   How does the media know what the market is going to do when it opens? Turns out, the information is coming from index futures contracts that trade before the market open.  These futures contracts allow investors to bet on the price of the index (Dow or S&P) at some point in the future.   A nice explanation is on investopedia.  You can see the state of futures contracts on most financial...

What level of fees should an investor (including a pension fund) pay?

June 16, 2015 Comments (0)

I got an update about my retirement account yesterday from TIAA-CREF.   It was good news - apparently the fees are going down on an equity index fund and also on a bond fund. Here's a snapshot of the statement.  My fees are now 0.06% and 0.07% for two index products.   Now that is what I call cheap! It got me wondering, how much would the NC Pension Fund pay at these rates? Assuming that the NC Pension Fund is about $90 Billion in assets, a 0.07% expense ratio would be about...

Reform needed at the NC Pension Fund.

June 14, 2015 Comments (0)

Andy Silton has a nice piece in today's N&O in which he criticizes the management of the state pension fund.  First - the information provided by the Treasurer's office is awful.   It is almost impossible to figure out where the money is invested and what the fees are and the information is always out of date. Second, the Treasurer seems to be pursuing a "pick winners" strategy.   This is a fool's errand.   You can't reliably pick winners in today's financial markets....

New editors of the Financial Review

June 11, 2015 Comments (0)

A little shameless self promotion. Srini Krishnamurthy and myself are honored to take over as editors of the Financial Review. The full details are over on the Poole College of Management site The Financial Review website is here:

The hidden risks in target date funds.

June 4, 2015 Comments (0)

My dissertation chair and coauthor, Jay Ritter talks about some of the risks in target date funds.  His primary concern is that these funds tilt towards bonds which implicitly exposes the investor to more inflation risk. I've blogged about target date funds before, and how they are like hotdogs, but not in a good way. 

How many active funds beat the SP 500 over the past 8 years?

May 13, 2015 Comments (0)

4    That's out of more than 7,000 mutual funds. Remind me again why anyone uses active management? Source: