Here’s Why Your Retirement Savings May Not be Safe in a Pension Fund – Video

Posted: February 21, 2013 at 9:51 am


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Here #39;s Why Your Retirement Savings May Not be Safe in a Pension Fund
A lot of pension funds are still struggling to make up investment losses from the financial crisis. But rather than scale back risks following those declines, many funds are getting aggressive. Pension funds are employing a strategy called "risk-parity" within their portfolios. The tactic has been around for years, but it has regained popularity as pension funds try to increase bond returns in a low-interest rate world. Essentially, pension funds are borrowing money to invest in bonds to boost returns -- the very strategy that contributed to the global debt bubble and led in part to the financial crisis. With risks of investing in bonds heightened more now that in the past few years, will pension funds and therefore people #39;s retirement savings get soaked once interest rates rise and cause ripple effects throughout financial markets?

By: wallstreport

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Here's Why Your Retirement Savings May Not be Safe in a Pension Fund - Video

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February 21st, 2013 at 9:51 am

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