When presented with investment proposals, keep in mind the old adage: “If it sounds too good to be true, it probably is.” Relief association trustees should use caution when making investment decisions, especially during times of extreme market volatility.
State law places restrictions on the types of investments that relief associations may invest in and sets limitations on exposure to higher-risk investments. We have received inquiries about investing in certain types of hedge funds, managed futures, and investments with short sales. Some of these types of investments are not authorized under state law. The list of authorized investment securities can be viewed here.
Published last in the October 2008 Pension Newsletter