{"id":628,"date":"2012-05-18T05:00:27","date_gmt":"2012-05-18T12:00:27","guid":{"rendered":"https:\/\/masonmyers.com\/?p=628"},"modified":"2015-01-28T12:58:45","modified_gmt":"2015-01-28T20:58:45","slug":"investment-strategy-fixed-income","status":"publish","type":"post","link":"https:\/\/masonmyers.com\/investment-strategy-fixed-income\/","title":{"rendered":"Investment Strategy – Sell Fixed Income"},"content":{"rendered":"

Pension Funds Buying Fixed Income<\/h2>\n

As investors<\/a> and business owners<\/a>, it is problematic to make decisions for the future with too much of an emphasis on the past. In reading a recent issue of Grant’s Interest Rate Observer<\/a>, they mentioned an eye-popping statistic fro\"\"m the 2012 Milliman Pension Funding Study<\/a>: pension funds are now, in a time of record high fixed income prices, allocating more of their portfolio to fixed income (41.4%) than to equities (38.1%). It almost seems that they are buying fixed income because<\/em> the prices are super high, rather than buying something where the price to value ratio is a bit more favorable.<\/p>\n

Sell High, Buy Low<\/h3>\n

In fact, pension funds and individual investors have a terrible habit of investing in asset classes as the prices are at their highest (think fixed income today or \"\"housing in 2007). This reminded me of the 1970’s when Warren Buffett was buying public equities like crazy, but pension fund managers only allocated 21% to equities in 1974 and 1977, and only 9% in 1978. These years were wonderful years to buy public equities.<\/p>\n

On the other hand, pension fund managers allocated a record 122% of net funds available in equities in 1971, a time of very high equity prices.<\/p>\n

An Opposite Investment Strategy<\/h3>\n

These numbers suggest doing the opposite from pension fund managers. So today, sell fixed income at these high prices and please do not buy. Whether today is the right time to buy public equities generally, I do not hazard a guess (give me a particular company, however, and I may be willing to offer an opinion). I do believe it continues to be a nice time to own private companies that can adapt to a changing environment as the economy, politics, and global trends change over time.<\/p>\n

\n
Categories:Investment & Business Models<\/a>, Warren Buffett & Berkshire Hathaway<\/a><\/span>
Tags:Berkshire Hathaway<\/a>, Fixed Income<\/a>, Investment<\/a>, Investment Strategy<\/a>, Pension Fund Investment<\/a>, Pension Funds<\/a>, Private Equity<\/a>, Warren Buffett<\/a>
<\/span><\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"

Pension Funds Buying Fixed Income As investors and business owners, it is problematic to make decisions for the future with too much of an emphasis on the past. In reading a recent issue of Grant’s Interest Rate Observer, they mentioned an eye-popping statistic from the… Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,112],"tags":[30,118,86,121,120,119,16,29],"yoast_head":"\nInvestment, Business Models | Investment Strategy | Mason Myers Business Blog for Owners, Investors<\/title>\n<meta name=\"description\" content=\"Business owner and investor Mason Myers writes about investment business models, as well as investment strategy on his business blog, masonmyers.com.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/masonmyers.com\/investment-strategy-fixed-income\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta 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