Economic Meltdown Felt In Alabama

Alabama Montgomery State investments take hit during America's financial crisis

by Associated Press

Published: Sun, October 05, 2008 - 10:59 am CST Last Updated: Sun, October 05, 2008 - 11:03 am CST

MONTGOMERY, Ala. (AP) - Alabama is taking a hit from the
nation's financial crisis. The crisis has lowered the value of
state pension fund, reduced earnings in a plan to send students to
college and eaten up more than $100 million of a state budget that
pays for prisons, state troopers and Medicaid.
But state officials says the long-term financial outlook of
these government operations is still sound. The most obvious impact
could be to the Retirement System of Alabama.
The RSA pension fund's values are down 8 percent to 12 percent
because of the turmoil on Wall Street. The pension funds total
about $32 billion.
But RSA chief David Bronner says the Alabama fund is in better
shape than most because of a conservative and diversified
investment plan.
RSA has invested in or owns golf courses across Alabama,
newspapers and broadcast stations and even a large New York City
office building.
Bronner says the different investments help in a huge way.
He also says the losses this year follow the RSA's gains of
about 17 percent the previous year.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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mjholmes Says:

Sun, Oct 05, 2008 at 9:16 pm

My own retirement plan is down 27% this year. RSA losing 12% sounds bad, but given the last two months of turmoil, that’s actually pretty good. In a year or two they’ll make that money back and then some. Long term investing is the best approach, and that’s how RSA is handling the fund. Buy a stock when it’s cheap.