A good investment approach is based on spreading your risk, diversifying your pOrtfolio. That is why mutual funds have blossome. Obviously, the government will be a lender of last resort, so there is that security. Additionally, what figures do we have to show that the portfolio was not diversified? The NIS did not go bankrupt when Clico collapsed so there was some diversification. The NIS was not the only institutional investor that suffered losses. Was it reckless? We need more info to address this question.
It was reckless, period!!! CLICO is one company...one company cannot be a diversified portfolio...
Was Clico the only company that NIS invested inIf so,,then you are correct it was reckless. How diversified was the NIS portfolio?
NIS invests largely in T-Bills and then Clico. I am not saying don't seek higher returns, but not a single company. They need to look at the Singapore model of using social security funds for industrial development. Lee Kwan Yew mastered this policy and made it into an art form.