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About Me.

Asset Manager 2 20 Rule; Proprietary Software Decreases Pension Wealth Daily.

 

Consider a few examples.  Start with an asset investment of $10,000.  How will it grow?

 

Model 1

500 Index Fund Admiral Shares (VFIAX)

https://investor.vanguard.com/investment-products/mutual-funds/profile/vfiax#portfolio-composition

VFIAX2 vpg_edited.jpg

The accumulated return is calculated for an initial 2014 investment of $10,000 with annual compounding, for comparison. The total return in 2024 was $31,044 ~ comparable to the return from a constant interest rate of 12% over the same period.  With inflation, the lack-of-losses in the constant 12% interest model minus inflation provides a greater return (by ~$6,200) than for the actual annual oscillating returns minus inflation on the $10,000 investment.  In 2022, principal losses (-19.49%) with inflation (-8%) caused total losses of - 27.49% taken off the principal value of pension funds. This caused a loss of $7,268 from the return over the full period.  For institutional assets of $100,000, zero capital returns are offered; only sub-inflation interest. With inflation losses, the institutional assets (pensions) earned an average interest of 0.71% i. e. loss of value, well below the implied total return. Pension assets, decreasing by more than 7.1% over 10 years, are completely unviable. https://www.pionline.com/largest-us-retirement-plans/2023

 

As the Blackrock CEO said at his 2024 Shareholder Meeting, "moments of dislocation and disruption have been inflection points for BlackRock. This is where opportunities arise for both BlackRock and our clients."  https://s24.q4cdn.com/856567660/files/doc_downloads/2023/05/2023-blk-annual-shareholder-meeting-transcript.pdf

 

Model 2. Blackrock comparison of shareholder gains VS institutional asset losses.

The model below relies on Blackrock published data for average % received by

shareholders /yr, VS “High Yield” (HY) average interest for Institutional (pension) Assets / yr,

(Here assuming a HY initial investment of $10k starting in 2014).

BR jpg_edited.jpg

In 2024 annual report, L. Fink, CEO, claims a 55% increase in value for "shareholders" over the last 5 years (using data calculated DAILY, not averaged annually).

Institutional Assets had many episodes of low or negative interest because shareholders were paid a higher % interest than Blackrock earned. (A Ponzi scheme.  Losses were often disguised by averages, e. g. as in this yearly average model.)

In Model 2, after 6 years, shareholder value increased by 127%, reduced to 119% after inflation. (The published yearly averages in the model caused the apparent increase at these rates.) The pension (HY) loss of value with inflation,  - 9.60%, was extreme.  If there is no earned income, there should be no income for anyone; not theft of pension asset principal.  Asset managers claim no fiduciary duty to preserve pension capital, just a “duty” to give to “shareholders”. The highest ownership fund shareholders are complicit asset managers.

https://ir.blackrock.com/stock-information/dividend-history/default.aspx

https://www.gurufocus.com/term/roe/BLK#:~:text=BlackRock%20(BlackRock)%20ROE%20%25%20%3A,2024)

BlackRock (BlackRock) Return on equity, ROE, was 15.91% interest, Mar. 2024.

Blackrock asset class percent earnings:

https://www.blackrock.com/corporate/insights/blackrock-investment-institute/interactive-charts/return-map

https://www.macrotrends.net/stocks/charts/BLK/blackrock/stock-price-history

 

Pension Assets provide 263 times more money to Blackrock than shareholders do, but only Institutional Assets lost value (of principal) after inflation.  These results were designed to transfer America’s retirement funds to the wealthiest 0.1%.  Episodes of extreme inflation were designed to correspond to the same periods of market disruption, increasing the loss of a higher percentage of institutional (pension) asset value.

 

It is very deceptive for asset managers to quote total return percentages per year. Calculations are done daily (~ midnight).  Stocks do not earn positive returns every day; but often are evaluated daily.  When a company, say Apple, introduces a new product, there can be good profits as the new product sells.  During the period between the introduction of new or upgraded products, the daily profits may be meager or negative.  When negative, the fees charged by asset managers are taken daily out of pension assets (that never recover).  Despite how the investments perform daily, asset managers charge a huge fee, over-a-year adding to ~2-4% of AUM for management service, and another ~ 20+% for shareholders (who provide less than 10% of the assets invested by institutions; e. g. pension funds and IRAs).  The institutional funds are not treated as shareholders, so they earn only a maximum of a few percent at best, not beating inflation; and suffer severe losses each day that the fund returns are less than those (annual ~22-24+%) that the asset managers have skimmed off the top.

 

Some asset manager companies are less than transparent.  Vanguard claims that the owners of each of its funds are its shareholders; claims its shareholders are other Vanguard funds.  Vanguard funds are largely a repackaging of investments from (mostly) other asset managers (called “shareholders”); but without fiduciary responsibilities to act in the interests of Institutional pension asset investors.  This means that Vanguard funds (and other asset manager funds) are a convenient way of transferring Institutional assets (pension funds) as profits to the bulk of cooperating asset managers; and, at > 20% profits, the wealth of these asset-manager “shareholders” explodes while the institutional (pension) assets decline. 

Our asset pension principal is used to pay “asset-manager shareholders” 20% returns. 

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