Could Australia’s superannuation funds become risky investors as an unintended consequence of rules to improve their performance?
It is an interesting example of the law of unintended consequences, but that doesn’t make it any less likely.
The current superannuation changes before parliament, which are due to come into force from 1 July, aim to improve investment performance by cutting off poorly performing funds from new members.
Game of musical chairs may make super funds worse investors
However, speaking at a parliamentary hearing, The McKell Institute spokesman James Pawluk said the laws might have the perverse effect of turning funds that are currently professional investors into behaving more like amateur retail investors – chasing investment trends and copying each other to avoid being the one left out in what will effectively become an ongoing game of musical chairs. Read more…..
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Nobel Prize-winning economist Joseph Stiglitz says U.S. government stimulus programs have failed to help the most vulnerable workers and companies during the coronavirus pandemic. He discusses longer-term challenges facing the U.S. economy and education system and explains how a younger generation of workers can retrain for jobs in the future.