Mary Ellen Angeletti: Notes on March 6 general education meeting at STRS

From Mary Ellen Angeletti, March 6, 2008
Subject: STRS Meeting, Thursday, March 6th

Chuck and I attended the STRS meeting this morning. I left following lunch at STRS to pass flyers to schools around the STRS area and then picked up Chuck at 3:30 to attend calling hours in Canal Winchester for a friend who passed. The meeting was not over when we left at 3:30.

This meeting was billed by Russell Investments as an educational meeting for the STRS Board members. IT WAS EXCELLENT, and we wish that more folks could have attended. Chuck said to share that he learned a lot today. We were correct in our suspicions. . . today turned out to be a prelude to bad investment news to come. . .probably the next STRS meeting, March 27th. OF course, the market dropped 240 points today so maybe they knew it was coming??? A lot of time was spent on asset allocation and John Osborn of Russell was encouraging the Bd. members to consider higher allocations to alternative & opportunistic investments such as private equity (buy-outs & venture capital), real estate, and a combination of hedge funds, commodities, infrastructure, & opportunistic investments. The goal would be to mute equity market swings while preserving total long-term returns. However, any of these would require outlays of huge fees ($125 million) which Russell feels will make money for STRS. $1 million cost per $1 billion invested. An in-depth discussion of each of these alternatives followed with considerations of risk being most prevalent.

Ernie Ankrim, Chief Investment Strategist at Russell Investments shared his outlook for the market.

...1. He said we do not know what the Fed's surprise rate cut will do.
...2. We don't know what impact the economic stimulus package will have.
(WE STILL ARE NOT SURE IF WE GET THIS.)
...3. We still don't know the magnitude of the balance-sheet damage to the Financial Sector.
...4. Market volatility likely will continue.

This meeting continues tomorrow, Friday, and we encourage all who can to attend on the 5th floor. Mary Ellen & Chuck