Follow up question: if professional investors didn't seriously include pandemic risks & effects in their financial models before this year, did they fail in their fiduciary duties?
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Before this year, what % of professional investors (at banks, pensions, hedge funds, etc) spent more than an hour in total seriously considering how a global pandemic might affect the economy?
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Note division of labour: investment organisations presumably delegate such considerations to some people, not all investors.
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Yeah, but if I was a professional investor who'd been reading The Economist for the last few years, I'd have already been having nightmares about pandemic-induced recessions long before this year... I'm just puzzled that people act like this is a surprise.
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How much time do they spend calculating the risk of an asteroid strike? Of nuclear war? Of a massive volcanic eruption causing another year without a summer? Calculating for mass hysteria like this is equally fruitless.
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I agree with you here. I've been involved in Asset Liability Modeling for Pension funds . However if this is now a recurring problem it'll have to be taken into account.
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This is s clumsy question. Who do you mean, exactly? Institutional investment plans are wholly governed by risk. But it depends on what risk, and who’s risk. Most fund managers are measured vs a stock/bond index. The meta strategy (what indices) is usually chosen by the client.
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You forgot to include NONE as an option.
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Dude you’re the most interesting follow on Twitter. Cheers!
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Not a professional investor, moved everything I could to cash on Feb 11.
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Ppl thought MERS, Ebola, Zika, no big deal, BTFD.
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