Isaiah BienAime

Spending Policy: Is Yours Ready for the Next Downturn?

Posted by Isaiah BienAime, Timothy T. Yates, Jr. on Nov 7, 2017

Topic: Governance and Policy | Investment Strategy | Operating Assets

In most Investment Policy Statements there is often a reference to two important, but conflicting, objectives: one, to preserve the purchasing power of the long-term portfolio in real terms, and two, to provide a stable. predictable and hopefully growing source of income to the institution that the long-term portfolio supports. Why the conflict? Because in order to generate returns that will sustain real purchasing power in perpetuity, the portfolio must be exposed to risk which often means volatility and thus potential instability or unpredictability in the income stream...

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