Now is the time to play it safe in the market given all the uncertainty in the economy, according to the chief investment officer of the California Public Employees Retirement System .
Factors such as high unemployment, the depressed housing market , the financial turmoil in Greece, and even the uncertainty in the CDS derivative market, are all cause for playing defense, Joe Dear, the CIO of Calpers, said in an interview on CNBC Thursday.
Dear said Calpers, the largest public-pension fund in the U.S, is also taking on a bigger role in managing its own investments.
"We are pulling that management in-house so we control the credit and the assets that we used for our cash position," Dear said. If Greece does default, "it's likely to be bad, so you don't want to be stuck with sovereign securities that may be impaired."
The recent drop in the market is due to a recalibration of growth expectations, "and that has a depressing effect," he added.
While many states are uncertain of their ability to fund their pension funds going forward, Dear said both California and Calpers haven't taken holidays on contributions. He still puts the fund's target return rate at 7.75 percent.Page 1 of 2 | Next Page