Buildup of Risks in Retirement Accounts
El-Erian notes:
“With interest
rates extremely low and the prices of stocks and bonds at historic highs,
finding safe investments that can help guarantee a comfortable retirement has
become increasingly difficult. This has put the managers of pension funds and
other institutions that invest on behalf of future retirees in a difficult
position, driving them to take ever greater risks in hopes of meeting their
performance objectives -- targets that are unlikely to be met absent a major
revamp of economic policies and corporate prospects. As a result, individuals
are increasingly being exposed to the threat of losses that cannot be recouped
quickly.”
Asymmetric Information in Finance
http://www.bloomberg.com/view/articles/2016-08-11/the-dirty-little-secret-of-finance-asymmetric-information