On this episode of Tape Talk, we talk through the ins and outs of risk-based 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 discussion 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?
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.