APA 6th!!!
The following 1. and 2. are my classmates work/opinion/research etc. Please provide a response to both 1. and 2. about 125 words each. Please respond as they are my classmates and make valid points, research, agreeing, etc
1. While all retirement plans have the end goal of providing a retiree with a level of income following retirement, how the plan arrives at this goal will the varying investment funds currently available. Briefly, a pension plan is a promise by an employer to pay a set level or percentage of the employees’ current income at the time of retirement (Josephson, 2021). Unlike employee-based contribution plans i.e., 401k, employees in a pension plan do not make contributions or choose investment options, rather the employer controls all these aspects (Johnson, 2021). Pension plans are more common in the government or unionized sectors, besides the lack of management and placing faith that your employer has set aside sufficient funding, another major drawback is the longevity and financial health of your employer during your retirement years (Johnson, 2021).
Jointly, pension and mutual funds can both be considered vehicles of investments, however, their purposes will separate them and possibly influence their performance (Alda, 2016). Pension funds are viewed more as long-term investments thus they will provide lower yet more consistent returns, Alda (2016) suggests this behavior occurs from members being unable to disinvest until retirement or under special circumstances.
2.I have certainly learned a lot throughout this course. Professionally, it has helped me understand a number of aspects about the industry that I have worked in for ten years now. One of the discussions that stands out to me is the discussion on the yield curve and its predictive power for forecasting a recession. Researching and coming to understand what the yield curve is showing when it becomes inverted was very interesting. While I currently work in a financial institution and deal with financial markets every day, understanding their function and why they exist was particularly eye opening for me. The money market and bond market chapters were particularly intriguing to me. I am exposed to the types of securities in these markets everyday so I enjoyed learning about topics such as how to calculate yields and how U.S. treasuries.
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