Md. pension system busy buying stocks 'We don't look at interday events,' executive director says

September 02, 1998|By Erika Niedowski | Erika Niedowski,SUN STAFF

After Monday's 512-point stock market collapse, Richard N. Dixon, state treasurer and newly elected chairman of the board of trustees for the Maryland Retirement and Pension System, sent a simple message to the retirement system's executive director: Buy, buy, buy.

"We don't look at interday events," said Peter Vaughn, the

recipient of that message, who was optimistically weighing which stocks to add to the state's portfolio even before the market closed up 288 points yesterday.

"What we look at are the fundamentals -- are the fundamentals deteriorating in the market? -- and we don't see that."

Even as investors big and small sent the stock market into a tailspin earlier this week by rushing to unload some of their assets during this time of international instability, a number of Maryland's long-term, more conservative investors seem to be holding steady.

And, like Vaughn, some are even taking advantage of what might be considered a "Red-Dot" sale on stocks.

Diane Camper, public affairs manager for the Annie E. Casey Foundation, one of the largest philanthropic foundations in the state, said AEC is in the stock market for the long haul, meaning that drastic one-day shifts in the market -- in either direction -- don't warrant similarly drastic reactions.

The Casey Foundation, which focuses on national children's issues from its headquarters in Baltimore, currently has about $1.4 billion in assets, thanks in part to the bull run in stocks. Of course, what goes around can also come around: A sharp decline in a foundation's assets, triggered by a full-fledged market crash, could have a substantial impact on that group's gift-giving activities.

In Casey's case, more than 60 percent of its holdings are in United Parcel Service, which does not trade publicly.

The rest of its portfolio, explained Camper, is fairly diverse. "I think there's a sense that we're pretty well diversified to withstand these periodic shocks," she said.

Vaughn, the pension system's executive director, said Maryland's $28 billion pension account is protected from volatile market forces -- even as much as a 25 percent correction over the course of a year. Now, though, Vaughn sees a chance to jump on some bargains: "This is a buying opportunity."

Pub Date: 9/02/98

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