- October 1, 2015: Vol. 9, Number 9

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Words, just words: Making sense of an uncertain investment environment

by Richard Fleming

If I were to ask investors to create a complete sentence using the words “markets” and “dear”, one possibility might be: “Dear me, look what the markets have done to our bond holdings, were we able to get out in time?” Or “The equity markets are now too dear for us to contemplate changing our asset allocation.” Pension fund investors in today’s uncertain, volatile, low-yield investment environment certainly have their work cut out.

You are a long-term investor but you like short-term updates. You’re sitting down at the quarterly investment committee meeting with your fellow trustee/fiduciary board members and your investment consultants. It’s not a happy time, but then reviewing investment performance and pension fund strategy in these years of rising longevity, market volatility and low returns has rarely been a happy occasion.

The liabilities — the known present and future outgo to beneficiaries — have weighed heavily. The assets — how tha

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