One reason, argues Ian Maxwell of Schroder Salomon Smith Barney, an investment bank, is that only the biggest firms can afford to get over the high barriers to entry in the high-return, low-risk niches of the mining business: iron ore, alumina, diamonds and industrial minerals.
Furthermore, this long-term return, high risk, engineering-lead venture, was financed by - wait for it - the City.
REITs offer investors a middle way between the high-risk, high-return vulture funds and stodgy, low-return Japanese property developers, such as those attached to the Mitsubishi, Mitsui and Sumitomo keiretsu.
Typically mutual funds is where we are looking at quite substantially right now for really one reason, and those tend to trend better with a lot less risk, so you know you can have market-like rate of return on high-yield-bond mutual funds with historically a third of the downside risk of the markets.
The return on such high-risk, often illiquid investments can be great when the market is going great.
There are few, if any, investments offering as high a risk-adjusted return as a public pension.
FORBES: Looming Risk of Municipal Defaults Forces Retirees to Consider Pension Buyouts
Small guys, by and large, are laboring under the high-risk, high-return delusion, the professors figure.
High-risk, high-return funds like most of those that New Jersey is selling interests in, control tens of billions of dollars of property world-wide.
Ocean Energy brings a whole portfolio of high-risk, high-return projects, from deepwater blocks off the coast of West Africa to one promising field that lies 9, 300 feet below the Gulf of Mexico.
The sales effort is a way to reduce exposure to some of the high-risk, high-return property funds that got scuffed up during the financial crisis, said Timothy Walsh, director of the New Jersey Division of Investment, which manages the state's pension money.
During the early years of the financial downturn, the value of high-risk, high-return real-estate funds fell 54% from their peak at the end of 2007 to the bottom in 2009, according to an index tracked by the National Council of Real Estate Investment Fiduciaries.
Insurers were eligible to get funds in return, if a large portion of their enrollees were high-risk and expensive.
FORBES: High-Risk Pools and Reinsurance: Potential Shock Waves to Insurers
The PIMCO Total Return Exchange-Traded Fund (BOND) is a diversified portfolio of high quality bonds that is actively managed in an effort to maximize return in a risk-controlled framework.
FORBES: Happy Belated Birthday, Spider! (SPY Celebrates 20th Anniversary Amidst ETF Boom)
This assumes that in retirement the couple switches to a lower-risk, conservative portfolio of government and high grade corporate bonds earning on average a real return of just 3%.
FORBES: Social Security Personal Accounts And The Financial Crisis
应用推荐