Investments

Myths vs. Facts

Fact:
At the market’s lowest point in 2008, CalPERS assets had dropped by $100 billion. Today CalPERS has regained $40 billion in five months, and in September, its market value of assets returned to the $200 billion mark. In the last 24 years, CalPERS has had 20 years of positive returns, 16 of which were 10 percent or greater. Our Chief Investment Officer said no one knows when the markets will return, but experts believe markets are improving.

Fact:
This year, we reduced our public stock allocation not because we have lost confidence in stocks, but in part to make more assets available for private equity. We believe private equity will outperform stock earnings by at least 3 percentage points. Private equity is the strongest long-term performance of an asset class in our portfolio.

Fact:
Our 77-year investment records show that CalPERS portfolio gains significantly increased when the Board removed restrictions on global stock investing in the mid-1960s. Since then, annual portfolio growth increased sharply with the notable exceptions of the two recessions of the current decade.