The Right Way to Manage Your Pension Fund

The way we deal with risk depends on how we define it. This is often a more complicated task than appears. Risk is such a many-headed monster that selecting the right head to strike at can be a big challenge. Corporate executives have traditionally defined pension fund risk in terms of the trade-off between risk […]

by

Robert D. Arnott

and

Peter L. Bernstein

by

Robert D. Arnott

and

Peter L. Bernstein

From the Magazine (January 1988)

The way we deal with risk depends on how we define it. This is often a more complicated task than appears. Risk is such a many-headed monster that selecting the right head to strike at can be a big challenge.

A version of this article appeared in the January 1988 issue of Harvard Business Review.

RA

Robert Arnott is vice president and strategist for Salomon Brothers Inc. with responsibilities in pension services and asset allocation strategy. Before joining the investment bank last spring, he was president and chief investment officer of TSA Capital Management.
PB

Peter L. Bernstein, who died in June 2009, was the president of Peter L. Bernstein, Inc., an economic services consultancy. He was the author of 10 books on economics and finance, including Against the Gods: The Remarkable Story of Risk (John Wiley & Sons, 1996).

The Right Way to Manage Your Pension Fund

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