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What do you think pension funds invest in? Also, with 401ks, you can invest in anything from small cap / developing world stocks, s&p 500s, large cap dividend
by smileysteve 10y ago
What do you think pension funds invest in?
Also, with 401ks, you can invest in anything from small cap / developing world stocks, s&p 500s, large cap dividends, private bonds, public bonds, and U.S. treasury bonds.
- ec109685 10y agoPensions have an unlimited time horizon, while personal 401ks don't. Yeah, you could put the money in more conservative investments, but you still as an indivisible bare the brunt of the risk.
- smileysteve 10y agoIf you have a large group of people commencing to draw down your fund, your time horizon can be quite short. Similarly, if you have future workers not in the program, you can't "pyramid scheme" it. 20 years of investing are required for most classic pensions and the CHP example workers are likely to have as many or more years than that. An appropriate age based fund (which would admittedly, likely have huge fees) would reduce risk of the money you'd be drawing down on in the next 10 years.