We intend to seek out the best performing outside money managers and negotiate the lowest possible fees. Market timing refers to investing in an effort to guess when the market will go up or down. No one knows when that will happen. By spreading our purchases over time, and investing consistently, we will move to a balanced portfolio without betting at any one point on the market's direction. Additionally, moving gradually gives us time to find the best outside experts to manage these new investments.
Prudence dictates our moving cautiously, but consistently.
A diversified portfolio is less risky that keeping all your eggs in one basket. Stock prices go up and down just like interest rates, and therefore, bond prices will fluctuate over time. By managing PERF's portfolio with a balance of different types of investments, the Board believes that the portfolio will be safer and will earn more in the long run. PERF is a defined benefit plan, which means that most of the benefit is based upon a fixed formula set by law. Only the Legislature can increase the benefits formula.