When read together, these statutes award considerable investment discretion to the Treasurer. Understandably, the General Assembly has chosen not to provide simply a laundry list of permissible investments to be checked off by the Treasurer in some clerical fashion. Finally, these statutes are silent as to the specific time when a permissible investment is to be sold. The current investment policy of the Treasurer is to buy fixed income investments and to hold them to maturity when possible. A large majority of state funds are invested in securities with maturity dates ranging between one and five years.
Some securities held by the state mature over ten to twenty years.
The credit rating of a corporate debt obligation may change several times over the life of the obligation. This is a normal occurrence as circumstances surrounding the obligation change. Also, notwithstanding the downgrading of the credit rating of a bond, the issuing company often continues to make interest payments, and the principal of the bond is often repaid when the bond matures. The risk of loss of interest or principal in the investment depends entirely upon the specific facts involved, and can be determined based upon an evaluation of those facts. In addition, it is almost always true that the downgrading of a bond reduces its price on the market.