Wisconsin, meanwhile, has become one of the first states to adopt an investment strategy called "risk parity," which involves borrowing extra money for the pension portfolio and investing it in a type of Treasury bond that will pay higher interest if inflation rises. cont on link.. http://www.msnbc.msn.com/id/35773999/ns/business-your_retirement/
Oh yea, for example. "North Carolinaâs assumption is 7.25 percent, and they havenât matched it in 10 years." [pension fund returns] How in the heck you going to borrow money, pay interest on borrowed money when you can't even make 7.25 in 10 years. (it's different this time)
?......a variation of the bond carry trade? Do they properly understand that TIPS can go down in value during a deflationary environment? :eek: