We’re rich! our state investment honchos tell us again. After managing to keep us from losing our shirts in the brief pandemic crash of the stock market in spring 2020 and posting asset losses for Fiscal Year 2020 of 1.4%, our trusty state investors report our South Dakota Retirement System assets grew 19% in FY2021 thank to returns of 22%.
Investments for the South Dakota Retirement System returned 22% for the year ending June 30, 2021, its trustees heard Thursday.
The large gain was much more than the 6.5% return necessary to keep the system in financial balance [Bob Mercer, “SDRS Investments Gained 22% for Year,” KELO-TV, 2021.09.02].
We could have seen returns of 28% if our state investors had rolled more dice into the stock market, but that’s not how our conservative chief investor Matt Clark plays the game:
There was a gray lining in the silver cloud. The capital-market benchmark was up 28%.
[Assistant investment officer Tammy] Otten said the under-performance resulted from a decision by the state Investment Council to reduce risk because many stocks seemed over-valued.
The council went as high as 73% investments in stocks but then pulled back, finishing at 52.9% in stocks and 33% in cash.
That reflected the long-term contrarian investing approach of state investment officer Matt Clark. “I would do it the same way all over again,” he said [Mercer, 2021.09.02].
If having 19% more assets this year than last year is underperformance, then please, Mr. Clark, Ms. Otten, please underperform every year.