Nevada State Pension Fund Manager Does Nothing All Day

Investment Analysis Clubs Macro Economic Trends and Risks
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{{ S teve Edmundson has no co-workers, rarely takes meetings and often eats leftovers at his desk. With that dynamic workday, the investment chief for the Nevada Public Employees’ Retirement System is out-earning pension funds that have hundreds on staff.

His daily trading strategy: Do as little as possible, usually nothing.

The Nevada system’s stocks and bonds are all in low-cost funds that mimic indexes. Mr. Edmundson may make one change to the portfolio a year.

News doesn’t matter much.

Will the 2016 elections affect his portfolio? “No.”

Oil prices? “No.”

He follows Fed Chairwoman Janet Yellen, but “there’s a difference between watching and acting.”

Mr. Edmundson, 44 years old, has until recently been a pension-world outlier. Other state retirement systems turned to complicated investments and costly money managers to try to outperform markets with algorithms and smarts.

His strategy is to keep costs low and not try beating markets, he says. “We’re bare bones.” }}

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You ought to come up with a name for this.

You know, something like ‘minimize the skim’.

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You know, I had early exposure to “the skim”. A guy that lived a couple of blocks from where I grew up in Hartford collected a $375,000 commission after greasing the skids to place $75 million worth of Connecticut state pension funds with a high-fee advisor. He escaped prison by the skin of his teeth.

https://www.sec.gov/litigation/litreleases/lr-20498

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His strategy sounded familiar so I did some googling.

From an analysis of client portfolios between 2003 and 2013, Fidelity found that their best investors were those who never touched their shares. But these weren’t investors with nerves of steel or those that somehow managed to pick winning shares from the outset. Fidelity’s most successful investors were already dead .

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