Never before in the short history of pension asset management have such high-cost, high-risk investment products proliferated pensions.
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Nor have high-risk investment divisions been the only ones to get it wrong.
The firm also lost millions by moving her money into a high-risk investment portfolio without her permission, it has been alleged.
The financial collapse in 2008 and subsequent federal bailout plus a string of hearings on the lax oversight and high-risk investment practices that led to it stoked public anger.
"Clearly it brings a level of credibility to what is a high-risk investment profile, given how much work there is to be done and who they're competing against, " he says.
Indeed, private equity is not the only illiquid, high-risk, private investment that has gained the attention of securities regulators since the market collapse of 2008.
China's biggest state-owned lender by assets, set up a fund for customers to invest in high-end pu'er tea, marketing it as a low-risk investment.
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The assessment may seem obvious to anyone who understands the high-risk, high-reward world of technology investment and development.
The idea that high rates in and of themselves would discourage investment, risk-taking and productive effort was absolutely alien.
For example, virtually every state pension that I know of has told locals, including participants and taxpayers, that investing in high-risk, high-fee, leveraged hedge funds is, in fact, a conservative investment strategy.
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On the other hand, if the employer is asleep at the switch and simply outsources investment decision-making regarding the plan to, say, an insurance company, the investment options will almost certainly be wrapped in a high-cost, high-risk variable annuity.
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Investors will want to be overweight below-market beta allocation, meaning investors will continue to move out of risk assets and into high end investment grade, defensive sectors like utilities and overall net long safety versus risk assets.
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