South Dakota

TexasTowelie

(116,413 posts) Sun Dec 5, 2021, 04:38 PM Dec 2021

State Investment Officer: Stocks Headed for 40% Correction--Thanks, Trump Tax Cuts!

South Dakota’s veteran investment officer Matt Clark usually brings good news. But at Thursday’s meeting of the South Dakota Retirement System Trustees, he said the state’s pension investments are flat so far this fiscal year:

State investment officer Matt Clark said the SDRS portfolio through the first five months of this fiscal year has earned “roughly around zero. So there is no return.”

Clark said stocks that SDRS owns out-performed last year and are running behind this year. Only about half of the SDRS portfolio currently is in equity investments. Asked to look ahead, he said, “Unfortunately, we can’t be optimistic at this time” [Bob Mercer, “As Investment Chief Sees Storm Clouds Ahead, SDRS Trustees OK a Record Cost-of-Living Hike,” KELO-TV, 2021.12.02].

Clark predicts the situation won’t improve in the near-term as the market must correct itself from over-valuation driven by the Trump tax cuts:

By his calculation, the U.S. stock market is at 166% of fair value and he expects the market will be hit at some point by a 40% loss. “The markets never stay overvalued forever.”

Clark said federal tax cuts helped keep Wall Street prices inflated, and now that Congress is spreading trillions in COVID-19 and infrastructure relief, inflation has reached Main Street and Walmart too [Mercer, 2021.12.02].

4 replies

= new reply since forum marked as read

Highlight:

State Investment Officer: Stocks Headed for 40% Correction--Thanks, Trump Tax Cuts! (Original Post) TexasTowelie Dec 2021 OP

Yes that's what I'm reading too for several months bucolic_frolic Dec 2021 #1

So the S&P is up over 20 percent this year. He's at zero. Tomconroy Dec 2021 #2

Exactly. It isn't as though he has called the market correctly in the past. TexasTowelie Dec 2021 #3

In fairness I reread it and he's talking about a fiscal year that must have begun July 1, Tomconroy Dec 2021 #4

bucolic_frolic

(46,561 posts)

1. Yes that's what I'm reading too for several months

Reply to TexasTowelie (Original post)

Sun Dec 5, 2021, 04:44 PM

Dec 2021

Dow 17,500 was bandied about in September.

Tomconroy

(7,611 posts)

2. So the S&P is up over 20 percent this year. He's at zero.

Reply to TexasTowelie (Original post)

Sun Dec 5, 2021, 05:05 PM

Dec 2021

And we should listen to his market predictions why?

TexasTowelie

(116,413 posts)

3. Exactly. It isn't as though he has called the market correctly in the past.

Reply to Tomconroy (Reply #2)

Sun Dec 5, 2021, 05:12 PM

Dec 2021

However, why would you deny a Republican the opportunity to a make a fool of himself?

Tomconroy

(7,611 posts)

4. In fairness I reread it and he's talking about a fiscal year that must have begun July 1,

Reply to TexasTowelie (Reply #3)

Sun Dec 5, 2021, 05:21 PM

Dec 2021

so the S&P is up maybe 7 percent. Still he's predicting a drop of 40 percent like what happened in 2008. Those only happen when a Republican is in the WH.

Reply to this discussion