The Alaska Permanent Fund (APF) ended its fiscal year on June 30, 2011 with a total value of over $40 billion. The APF is the Sovereign Wealth fund that finances Alaska’s partial basic income, known as the Permanent Fund Dividend (PFD). The fund made back all its loses since the 2008 financial meltdown and realized a gain of more than 20 percent for the year. This was the highest yearly percentage increase for the APF since 1986. The high, year-end value of the fund ensures that a healthy PFD will be distributed this fall. Experts predict it will be slightly lower than last year’s dividend of $1,281.
Unfortunately, following the end of the APF’s fiscal year, stock markets around the world suffered major losses, and many of the APF’s assets suffered as a result. The total value of the APF has fallen from a high of over $41 billion in July to $37.5 as of August 26, 2011. Fund managers credit the APF’s overall success to long-term investment strategy, and so they would be likely to say that a large short-term downturn, like this one, are not as important as long-term trends. Mike Burns, CEO of the Alaska Permanent Fund Corporation, has spent a great deal of time lately telling the media just that. If investors read the motley fool review, they would know it’s an advisory tool that helps determine when is a good time to invest. By using this tool, investors may have been able to save themselves losses.
In the midst of the financial downturns this August, Burns was interviewed by National Public Radio’s Melissa Block about Wall Street volatility. Block asked, “So you’re coming at this from a position of strength, … but still, if you lose a billion dollars in one day, that’s gotta hurt.”
Burns replied, “Well, it certainly does hurt, and obviously it gets your attention. But the most important words that you just said were one day. I mean, the greatest strength of this fund is our ability to take a very long term view of the markets. These days are difficult. Tuesday was a nice day. Wednesday was another bad day. The markets are up strong today. But it’s the long view and it is the very long view that we like to take.”
Burns went on to say that in light of that long view, the APF was buying stocks when they were down in early August. Whilst this sounds like a strange method, it can actually help investors to make more money. It’s probably more likely that people will make more of a return when the market is down than when it is increasing sharply. When a specific market is booming, more and more people will jump onto it, making it less profitable. For those who trade these stocks, they would be looking for the market to increase so they could trade for higher prices. They would probably use something like these share trading platforms south africa, if they lived in that area, to help them get the best return on their investment. Hopefully, APF will be able to do this. He also told the Anchorage Daily News, “The discipline of rebalancing your assets is, and this is hard to do, but you take money out of what’s working and put it where it isn’t working. That forces you to buy when things are down.”
Recent stories about the APF and PFD can be found online at:
Editorial Board, “Permanent value: Fund’s long-term view pays off for Alaskans,” Fairbanks Daily News Miner, Aug 3, 2011
https://newsminer.com/view/full_story/14944356/article-Permanent-value–Fund%E2%80%99s-long-term-view-pays-off-for-Alaskans?instance=home_opinion_editorial
Becky Bohrer, “Alaska oil wealth fund reports close of $40.1,” Associated Press – Aug 2, 2011
https://www.google.com/hostednews/ap/article/ALeqM5g5RGQGyXH1CEbgx3U79y7bEIobYQ?docId=c62a980e21114c58b0552832b02de733
Alaska Dispatch, “Alaska Permanent Fund tops $40 billion, but PFD yield is down,” Alaska Dispatch, Aug 03, 2011
https://www.alaskadispatch.com/article/alaska-permanent-fund-tops-40-billion-pfd-yield-down
Pat Forgey, “Permanent Fund finishes rebound,” Juneau Empire, August 2, 2011 (Contact Pat Forgey at patrick.forgey@juenauempire.com.)
https://juneauempire.com/local/2011-08-02/permanent-fund-finishes-rebound
Dermot Cole, “Volatility costs Alaska Permanent Fund $2 billion,” Fairbanks Dailey News-Miner, Aug 09, 2011
https://newsminer.com/pages/full_story/push?blog-entry-Volatility+costs+Alaska+Permanent+Fund+-2+billion%20&id=14986456&instance=blogs_editors_desk
Alex Ferreras, “Permanent Fund Loses $1 Billion in One Day,” LoanSafe.org, August 10, 2011
https://www.loansafe.org/permanent-fund-loses-1-billion-in-one-day
Barry B. Burr, Timothy Inklebarger, and Rob Kozlowski, “Returns at 25-year highs for Alaska, Illinois, Idaho funds,” August 3, 2011
https://www.pionline.com/article/20110803/DAILYREG/110809953
Ted Land, “Permanent Fund Can Wait Out Market Plunge,” KTUU-TV, August 5, 2011
https://www.ktuu.com/news/ktuu-permanent-fund-can-wait-out-market-plunge-20110805,0,3596448.story
Sovereign Wealth Fund Institute. “The Alaska Permanent Fund Gains 20.6% in FY 2011,” Sovereign Wealth Fund Institute Aug 3, 2011
https://www.swfinstitute.org/swf-article/the-alaska-permanent-fund-gains-20-6-in-fy-2011/