What the UNJSPF CEO said in October 2008 is almost about the same that is being said in UNICEF Staff News of January 2009 ( page 8, Retirement, Should I Worry About My Pension?).
We all got to have hope because there is no one smarter than random events. In investing most of us and pension funds will seek disaster in too much active investing. Perhaps, passive investors with well-diversified portfolios's may beat the busy-bodies (active investors). However, no one knows what lies on the tail-ends of a normal distribution. Always history is taken as a great example of success, but not so much of failure. We have had a few financial disasters since the 1900's, at the worst tail end was the great depression which took almost 25 years to recover. Anyone who bought stocks in mid-1929 and held onto them saw most of his or her adult life pass by before getting back to even.
So we will have to await the next CEO's statements or quarterly update or soon to be published annual letter for 2009 (the 2008 annual letter was published in February 2008).
Many things can happen with the current downturn. It can get worse before it recovers. But how soon it recovers depends on whether it gets worse. So far we see that for January 2009 the market has dropped 9% in January 2009, that is a lot for 31 days. So, the market can take a few years to recover (2-3 years) or a longer period to recover (more than 10 years). Of course, the other unknowns are the international political events that finally affect markets. At least in the US the current downturn is severe, so don't expect a quick recovery. We continue to have faith in the management of the UNJSPF and I think the people who need to worry most are those currently in employ and not the current retirees. At worst, we'll all share in the burden.
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