Does Your Investment Plan Consider Risk?

By Mark J. Perry: Pensions & Investments has a nice chart showing the evolution of public pension investment portfolios. Back in the early 1980s, public employee funds were made up of around 38% stocks, 50% bonds, 7% cash, and 5% "alternative investments," which include hedge funds, private equity, and so forth.

James Picerno submits: Moshe Milevsky, a professor at York University, recommends thinking strategically about your “personal beta” for managing risk. That begins by evaluating your human capital, he advises in today's Wall Street Journal.

Gold stocks have historically ranked among some of the most volatile asset classes. Over any given one-year period, it is a non-event for gold stocks to move plus or minus 38 percent. This DNA of volatility is about three times that of gold bullion, which carries an annual volatility around 13 percent. Despite this volatility, our research shows that investors can use gold stocks to enhance returns without adding risk to the portfolio.

Scott Leckie is a principal at Takota Asset Management, an activist, value-driven money management firm formed one year back. Prior to that Leckie was a founder of the MMI Group, a money manager that catered to high net worth individuals and which was acquired by National Bank Financial in early 2008.