The LEARNING library

Too Risky?

According to the Wall Street Journal, San Diego County’s Pension Manager is taking more potential risks in order to fund retirees’ liabilities.  How? They are buying derivatives (futures contracts) which can lose more than is originally invested.  In addition, they are borrowing money which exposes them to more risk! Why? To attempt to deliver on promises made.

What about you? How many risks are you taking to fund your own retirement?  Can you control risk and understand your exposure to it?