0
0

Institutional investors: stock market boon or bane?


 invite response                
2011 Aug 22, 4:50am   1,340 views  1 comment

by terriDeaner   ➕follow (0)   💰tip   ignore  

I keep thinking about this... How much are yield-chasing institutional investors pushing up stock prices right now? For instance Calpers is obliged to chase a 7.75% return target.

Calpers eyes maintaining 7.75 percent return target
http://www.reuters.com/article/2011/03/16/us-financial-calpers-target-rate-idUSTRE72F3MS20110316

If so, this can't go on forever, at some point in the near future many of these institutional investors are going to have to cash out to pay Baby Boomer pensions. Bloomberg had a bit on this today:

Boomers May Stall Stocks for Decades: Fed Paper
http://www.bloomberg.com/news/2011-08-22/baby-boomers-selling-shares-may-depress-stocks-for-decades-fed-paper-says.html

#investing

Comments 1 - 1 of 1        Search these comments

1   corntrollio   2011 Aug 23, 8:53am  

Having a target like that encourages riskier and more illiquid investments. That works for universities, although they have to be prepared for an occasional lean budget, but works less for a pension fund where a larger number of people, relative to before, are coming closer to retirement.

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   random   suggestions   gaiste