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By Fernand Grulms, Managing Director, PECOMA Actuarial and Risk S.A.
Lord Keynes already recognised that "in the long run we are all dead". Nonetheless pension money is invested for the long run. Some Canadian pension funds, like PSP Investments or Caisse de Dépôt et de Placement du Quebec have time horizons of 75 years or more. These pension funds invest first pillar pension money which are organised by Social Security In Europe. They have a very long term horizon because 1) social security pensions are paid out as a life annuity and not a lump sum and 2) early redemptions of pension rights are not allowed as it is often the case for occupational pensions.
Every investor of course tries to maximize the risk-return dilemma. Long term investors like...
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