(2:30 p.m. PST)
Wednesday is the last day of the 2016 Milken Global Conference, and today definitely had an unhurried vibe. There were fewer sessions, some of the crowds had melted away, but the topics of conversation were no less interesting or important.
The stand-out session for me today was investment-related: “Taking the Long View: The Dangers of Short-Termism.” It was a panel filled with some of the biggest institutional asset owners in the world. The chief investment officers of CalSTRS, New York City, New York State, and the Government Pension Investment Fund of Japan gathered to discuss the difficulties of maintaining a long-term perspective with continual calls for short-term measurement and reporting.
What struck me most about the first part of their discussion what how similar it was to the savings and investment hurdles that I face and that most retirement savers face. For the individual investor, the struggle is to de-emphasize short term volatility (be it positive or negative) and focus on outcomes that are years or decades off. These incredibly large pension funds have the same difficulty. With investment horizons that are decades (in some cases, a century) out, the continual call for quarterly or even monthly reporting can become a distraction. All of the panelists admitted a key hurdle in their jobs was balancing that requirement for regular, short-term reporting with a constant focus for them and their asset management partners on the long-term. Reporting results every three months, while important and understandable for these government entities, felt like a philosophical departure from their mission.
I recognized this same feeling from when I look at my own 401K statements. My focus is about two decades out, but sometime it gets hard to ignore the market movements day to day. But, I’m diligent. So it’s nice to know that this feeling, and this diligence, is comparable with the biggest of the big investors as well.
Over the years, I’ve recognized this feeling as a microcosm of the Milken Global Conference, where panel discussion topics run the gamut: finance, government, sustainability, poverty, sports, media, even meditation. Regardless of how foreign the concept, I’ve always walked away with an understanding that I could relate to my own world. And I’ve tried to take that understanding and apply it back to my life and my work. I guess that’s the benefit of gathering the best minds in the world together, for even a short time. Definitely a session to check out on the Milken website.
As the conference wraps up, the general mood of optimism remains, but the character of it shifts. For the last three days, we’ve had conversations about creating a better future. Everyone is now definitely more equipped to turn those conversations into action.
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