Friday, October 10, 2008

Pension Plan to Members: Stop Calling, yes, we are looking to BUY stocks.


The 30,000 members of the B.C. public service recently received an email from the government's pension manager: Stop calling us - your pension is safe!


Furthermore, they stated, we are looking to buy stocks in this environment, in order to "normalize" our equities exposure (currently at 62% of investments).


Canada's much larger pension plan, the CPP, won't have to begin any capital drawdowns until 2019. As they put it ...

"We can also invest a higher proportion of the fund in areas such as private equity and venture capital that typically require several years to generate returns. Also, substantial annual inflows allow us to make investments with new cash rather than having to sell existing investments to fund new opportunities."

So I think we can assume that, in this environment, they are probably stock buyers too.

I guess "someone" must be selling stocks to those with truly long-term outlooks.


The pension plans are buying - what does that tell you?


JW

The Confused Capitalist

No comments: