State Employees’ Retirement Fund Market Value Altimeter
December 2006
| Valuation Date |
Market Value (in billions) |
| 10/31/06 | $11.026 |
| 9/30/06 | $10.836 |
| 8/31/06 | $10.699 |
| 6/30/06 | $10.494 |
| 3/31/06 | $10.590 |
| 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 |
As noted above the market value of the State Employees Retirement Fund investment portfolio rose by 190n million between September 30 and October 31, 2006, a new record. October was a good month for alternative assets. A new asset class was added during the past quarter titled tactical assets. This is a tactical asset allocation account with a current market value in excess of 300 million. The new class was created to take advantage of tactical market opportunities while leaving the long term underlying strategies of the major portfolios in place. There are a number of uses for this asset class. We quote and concur with the recent remarks made by the previous State Treasurer, Jay Rising, when he expressed his “gratitude to the members of the Committee for their wise counsel and dedication to both the current and future retirees of the State of Michigan Retirement Systems (SMRS).”
Observations, Facts and Assumptions
Mr. Knight Kiplinger, Editor-in-Chief of the Kiplinger magazine and Kiplinger letter has voiced an interesting observation. “The biggest barrier to becoming rich is living like you’re rich before you are.” We read somewhere that investing in stocks, bonds, real estate and so forth, etc., is like weather forecasting, an inexact science. Economic growth clocked in at 2.2% in the recent third quarter was better than expected. (Michigan didn’t contribute to this percent.) Despite troubles in the housing market and automobile industry the Dow Jones industrial average exceeded its January 200 high on November 29, 2006 at 12,226.73.
The mechanics of the S&P 500, Nasdaq and Dow Jones Industrials probably doesn’t make sense to some readers — particularly those who have no or little stock as investments. Also, the word volatility may have no meaning to those same individuals. Those in the know volatility means the size and frequency of fluctuation in the price of stocks, bonds or mutual funds. It is recommended in order to temper the results of the volatility of the stock market is to diversify the purchase of stock from different markets. If an investor is fortunate enough to have received respectable dividends from their stock Uncle Sam will want some. The average raise for U.S. workers (probably not state retirees) could hit 3.7% this year. The increase, however, likely won’t keep up with inflation that is on pace for a 4.7% raise for 2006.
Tidbits that may prove interesting reading: When it comes to happiness Money Magazine states “it’s better to be rich than to be poor.” (smart magazine.) Also it states that 56% of people who make more than $75,000 a year say they are very satisfied with life. Only 24% of people who make $25,000 or less a year say they are very satisfied with life. Once you earn enough to cover your basic needs, being much richer does not make you much happier, the article states.
A woman reaching the age 65 can now expect to live, on average, nearly 20 more years while a man can expect to live another 16.8 years. (National center for Health Statistics) Some who beat the average only find they’ve run out of money. Not state retirees we have a COLA.
In the early 1980’s just a fifth of all households invested in stocks. Today, slightly more than half of all U.S. households invest in equities either directly or indirectly. In an average year it appears that we have two good quarters in our stock investments and two quarters not so good. What we hope for is that the good quarters out perform the bad ones.
“A small fortune starts as a small portion compounded over time.”
Did You Know
- The United Kingdom eats more cans of baked beans than the rest of the world combined. (There is a joke here someplace.)
- One out of twenty people have an extra rib. (Note: Could the other 19 be called Eve?)
- Both optimists and pessimists contribute to our society. The optimists invest the airplane and the pessimists the parachute.
- The dot over the letter “i” is called a “tittle.”
- You can’t be all things to all people. (Amen.)
Ponder This
- Seen it all, done it all. Can’t remember most of it.
- You can’t have everything. Where would you put it?
- When you go to court you are putting yourself in the hands of twelve people who are not smart enough to get out of jury duty.
- Show me a politician who is poor and I will show you a poor politician.
- There are worse things than getting a call for a wrong number at 4:00 a.m. It could be a right number.
Commentary
My wife Jean thanks you for all prayers and well wishes directed in her behalf during a recent illness. At this time she is doing exceptionally well.
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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