State Employees’ Retirement Fund Market Value Altimeter
August 2006
| Valuation Date |
Market Value (in billions) |
| 6/30/06 | $10.494 |
| 5/31/06 | $10.447 |
| 4/30/06 | $10.685 |
| 3/31/06 | $10.590 |
| 2/28/06 | $10.493 |
| 12/31/05 | $10.273 |
| 12/31/04 | $9.785 |
| 12/31/03 | $9.369 |
| 12/31/02 | $8.573 |
| 12/31/01 | $9.914 |
| 12/31/00 | $10.890 |
| 12/31/99 | $11.055 |
| 12/31/98 | $10.020 |
| 12/31/97 | $8.922 |
| 12/31/96 | $7.654 |
| 12/31/94 | $5.385 |
| 12/31/90 | 3.9935 |
The market value of the State Employees Retirement Fund increased 47 million between May 31, 2006 and June 30, 2006 reflecting a bottom line of 10.494 billion. This is near to the same figure ending in February, 2006. The following month, March, showed 10.590 billion with an asset allocation as follows: Domestic Equity: 5,167 million – 48.8%; Bonds: 1,692 million – 16%; International Equity: 1,416 million – 13.4%; Private Equity – 1,230 million – 11/6%; Real Estate: 891 million – 8.4%; Cash Equivalent: 194 million – 1.8%. In comparison to its peers the fund is in excellent condition.
We are highlight Jon M. Braeutigam this month as Administrator of the Mortgage and Real Estate investment portfolio for the State of Michigan Retirement Systems. Mr. Braeutigam is responsible for formulating and implementing, in conjunction with the Director of the Bureau of Investments, portfolio strategies and policies necessary to achieve performance objectives, striving to achieve an annualized rate of return on the real estate portfolio that meets or exceeds the NCREIF Property Index (minus an adjustment for standard industry advisory fees).
Prior to his appointment as Administrator Mr. Braeutigam worked seven years as a Treasury Investment Specialist in the Mortgage and Real Estate Division and was responsible for recommending the purchase, sale, restructure and modification of various real estate investments for the equity and mortgage real estate portfolios of the State of Michigan Retirement Systems.
Mr. Braeutigam graduated with honors from Michigan State University with a Bachelor of Arts Degree in 1985, majoring in Purchasing, Transportation and Operations (Supply Chain Management) and in 1987 graduated from the same institute with an M.B.A. in Finance.
Observations, Facts and Assumptions
It appears this is a time that economically speaking optimists and pessimists both are taking their turns in getting this country’s attention. The bd news for those receiving small pay increases is inflation might eat up the gains. Inflation last outpaced salary increases in the early 1980s that saw double-digit inflation. Federal Reserve Chairman Ben Bernanke recently said that at this time energy prices and a slowing housing market were cutting into consumer spending which accounts for two-thirds of total economy growth. But he said the slowdown was being “cushioned” by strength in business investment on new buildings and equipment. Apparently the last quarter of 2006 and the first quarter of 2007 will tell the story. Oil prices, inflation and interest rates are a concern. It is anticipated that oil will be more expensive over the next twenty years than it has been in the past. Demand from countries like China and India will outpace new supply. Fortune magazine reports that natural resources are driving the global economy as never before. Five of the top ten companies on Fortune’s 2006 Global 500 are oil companies. Exxon leads the pack for the second straight year. In 2005 its revenues jumped 26% and its profits hit 36 billion. The Mercer Human Resource Consulting firm anticipates that pay raises would rise by 3.5% this year and next, while inflation would grow by 3.1% this year and 3.3 percentage points in 2007. Overall such a forecast doesn’t sound so bd. Elderly SERA members listen: Let not your heart be troubled. Our reward is out there someplace.
The past six months we have all been exposed to a tirade of TV, radio, newspaper and mail advertising huckstering the virtues of a chosen individual running for elected office opposed to an opponent who allegedly lives a devil’s life and who philosophies are contrary to any sane person. Unfortunately so called “mudslinging” appeared quite prevalent right up to Election Day August 8. Allegations, innuendoes and interpretations to a lesser degree, included the following: Abortion, same gender marriages, flag burning and desecration, immigration, Iraq war, embryo stem cell research, voting along party lines, Federal minimum wage, moderate, conservative and liberal, etc. We hope as always that the better person wins in respective elections. Prayer might help!
Did You Know
- Tobacco will fell one billion persons by the year 2100. Already tobacco accounts for one in five cancer deaths.
- Safety belt use among older drivers involved in a crash — over 90%. Most of the nonusers are older men. It is suggested, if these men are in my peer group, please change your habits.
- Humans shed 600 particles of skin every hour — about 1.5 pounds a year.
- Euouae at six letters is the longest English word made only of vowels (medieval musical term).
Ponder This
- By working faithfully 8 hours a day you may eventually get to be boss and work 12 hours a day. Robert Frost
- Question: What did summer say to winter?
Answer: I’m going to fall. - Question: What is the center of gravity?
Answer: V. - Volunteer — Takes on work that makes no cents.
- Bachelor — A guy who never finds out how many faults he has.
Editor’s note: Al Trierweiter is a former President of the Lansing SERA Chapter, former Chairman of the Michigan SERA Coordinating Council, former Legislative Representative for both the Lansing Chapter and the SERA Council. AI may be reached at 6440 Old River Trail, Lansing 48917; phone 321-0041.
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