[quote=livinincali]
The S&P was around 350 in 1992. It was around 1650 in 1997. Guess what that’s compound interest rate of 11%. Surprise, Surprise, CalPers managed to match the S&P over the same time period. Although one that was pretty incredible run for stocks and will likely never be repeated again.[/quote]
Right. Which means they weren’t investing solely in low risk stuff during that period. They probably did have a pretty significant chunk of their assets in low risk investments like treasuries and mortgages. Which means they must have earned substantially more than 11% on the rest of the portfolio. Which also means they weren’t suddenly “forced” to seek higher yields when the Fed lowered the discount rate after the dot-com crash. They were seeking those higher yields well before that.
