Because they can? Nevada's pension fund is run by one guy who parks it all in Vanguard.

The whole point of a pension fund is that you can only add money and never take it back.

It doesn't work out if many people try to cash out.

Nevada PERS is one of the worst examples as well, missing it's investment targets over pretty much any period of time you can define.

Because its targets were quite high. CalPERS much higher fees missed its similar assumptions.

Pensions do pay out you know when people retire

Well at least he's not putting it all on black :-) Pensions funds should not blindly put 100% in equity.

Btw I have had a briefing from a trustee of one of the really big UK pension funds and they in no way invest like that.

Given the briefing was under "Chattem House Rules" I cant say who and which major firm got sacked :-)

They have index funds for bonds also.

$26 billion is not such a vast amount on the scale of the economy or the stock market, especially on the timescale of years. It is only vast relative to the amounts of money people are familiar with in everyday life. Financial markets are rather more robust than some people think, and can handle moving money around. Do you have a more specific argument in mind, or is it based purely on the vastness of the sums involved?

That’s the GDP of a smaller, developing nation. There are many hedge funds that manage less than that.

Amazon’s whole HQ2 competition took the US by storm and indirectly led to tons of speculative real estate investment all over the country, yet it involved much less than $26 billion...

Yes, such a sum will likely not have a noticeable effect on the US stock market as a whole, but that doesn’t mean it’s a sum that can be invested as easily as many seem to assume.

It's usually wrong to compare fixed amounts of money (units of $) with GDP (units of $/year), "stocks vs flows". As far as I know, Amazon's HQ2 was much more to do with public relations and lobbying than anything to do with money, and I believe "took the US by storm" is a great exaggeration of the actual events, so I don't find what you're saying convincing. As others have pointed out, pension funds noticeably don't have a problem investing large amounts of money despite being in a similar situation. All the aspects you seem to be worried about are routinely handled in the financial markets.

I understand the difference. I was just using GDP to demonstrate that the amount of money we’re talking about could run a country’s entire economy for a year.

The competition for HQ2 was fierce across the US. States and cities were bending over backwards to meet Amazon’s demands. Any whiff of activity or rumor was covered by both national and regional news. Real estate investors were buying up land in virtually every state. All of this for a potential economic benefit much lower than this $26 billion we’ve been talking about. It was a nationwide frenzy.

Again, the point is that investing $26 billion can have an effect depending on how it is invested, not that it will definitely have an effect.

$27 billion is not that much on a global scale, and it won't greatly alter prices if spread out.

Why not? The stock markets are large enough that you could easily invest billions of dollars and get average results. The main reason to do something else is if you can get above-average results (which can include considerations like lower drawdowns, less exposure to a single currency, etc.)

Care to prove them wrong? Or at least make an argument?