Has the stock market downturn since October 9, 2007 affected the value of the PSRS/PEERS investment portfolio?
Yes. All large institutional investors that are invested in the stock market have been affected by the downturn in the market. Even with the current bear market rally of 36%, the U.S. stock market (S&P 500) has still declined over 38% from October 9, 2007 through July 1, 2009. However, only a portion of the PSRS/PEERS assets are invested in the stock market. This diversification (as described above) provides the Systems with a moderate degree of downside protection in periods when the stock market declines. Have you changed your investment strategy in the recent market downturn? Our long-term investment strategy has not changed: investing the Systems’ assets in a manner to earn the 8% actuarial assumed rate of return over a long time horizon. As such, we have continued to deploy assets in attractive investment opportunities that are expected to perform over the long-term. However, early on in the midst of the bear market we lowered the total risk profile of the Systems. Specifically, w
