On this episode of Tape Talk, we talk through the ins and outs of risk-basedĀ investing. Plus, the Kentucky pension reform bill has been released, is there anything unexpected in the details?

The Kentucky Pension Bill

There’s been a lot of discussionĀ in the news and on social media about the recently released bill to reform the Kentucky pension system and keep it solvent. We’ll take a look at some of the key facts and what they mean to you. Are new teachers getting a raw deal with the new 9% mandatory contribution? Is the retiree health care contribution a bait-and-switch? Who gets affected the most by the new retirement payout calculations?

 

Risk-based Investing

While the market appears priced to perfection here from both an earnings and economic standpoint, there are many who still put forward the virtues of completely passive index-based investing. What if there was an alternative that took into account the risks present in any particular investment, index, sector, or stock at a point in time? What if investors weren’t completely passive but made their investment decisions based on a calculated potential for loss versus the potential for gain. That’s precisely what risk-based investing aims to do. We’ll break down how risk-based investing works practically and some ways it might be useful in a portfolio.