Meriden Retirement Board
Tuesday – October 10, 2006
Overview
Falling energy prices and a favorable employment outlook have lifted the markets in recent weeks while Wall Street warily eyes the outcome of the midterm elections, already discounting a shift in control for the US House of Representatives. The Federal Reserve meeting later this month seems unlikely to provide any drama in the closing days of the election campaign. Despite the popular belief that a strong economy favors incumbents, there is growing evidence that other issues (Iraq, North Korea, Congressional ethics) will create some Washington turmoil.
The Dow Jones Industrials reached a curious new high, with a modest reaction from investors. An inspection of the 30 stocks that comprise the DJIA shows only four that reached new high ground during this rally. The majority are well off their individual highs. The markets remain concerned.
Meriden Retirement Funds
The City Employees Retirement fund closed the quarter at $124.1 million, a positive return but below the index. The Police/Fire pension funds also closed flat, at $93.6 million, losing value in the energy and metals sectors that have served so well in recent quarters. The composite funds total $217.7 million fractionally higher for the quarter and up 7.5% for the 2006 calendar year.
Investment Sub-Committee
The Meriden Board’s Investment Policy Statement is being reviewed currently by the members of the Investment Sub-Committee. After an initial discussion of the current IPS on September 26th, the committee is working on a draft of a possible revised statement that will reflect the continued growth of the funds and the risk control and opportunity strategies available to the Board in future years. The draft policy should be completed by the November meeting for the Board to begin its consideration of any recommendations.
Patrick J. Sheehan
Gerald Hazen Glass
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