“Public Pensions Need Gamblers Anonymous,” blared the op-ed by the American Enterprise Institute’s Andrew Biggs in the Wall Street Journal last week.
Can it be true? Did the trustees of CalPERS just take retirement funds for 1.7 million Californians – backed up by our tax dollars – to Las Vegas and put it all on black?
Of course not. Biggs is probably talking about speculating through black box investments and shadowy hedge funds, right?
Wrong again. The risky investing strategy we are warned against: the stock market.
As a measuring stick, Biggs trots out the “100 minus age rule,” which says that an individual should invest no more than that percentage amount in stocks and other so-called risky assets. (So a 30-year-old might have 70 percent of his or her investments in stocks and 30-percent in things like bonds,