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This article focuses on the key decision affecting the investment performance of public-sector pensions--asset allocation. It reviews some fundamental concepts, examines how pension plans arrive at their allocation decisions, and then examines the historical shift toward equities.
The investment of retirement assets is a complex business requiring individual and institutional investors to make a host of decisions to plan and execute an investment program. Despite the complexities, the ultimate success or failure rests to a surprising degree on just one decision: the asset allocation decision. This article examines the importance of the asset allocation decision, ...