County funds in the marketApr 9, 2017 By Steven R. Peck
Let's watch the state's voter-approved investment plan with an eye toward our own
For the first time in history, some of Wyoming's long-term financial reserves are going to be invested in the stock market. Wyoming voters approved the idea last fall.
Might Fremont County do the same thing? Fremont County Treasurer Scott Harnsberger has raised that possibility.
It's not hard to see why. At the very time Wyoming voters were approving the statewide measure through a ballot initiative, U. S. stock markets were zooming higher. Backers of the constitutional change couldn't have asked for a better election campaign than that. Wyoming State Treasurer Mark Gordon made a strong case for the initiative, and the gains in the market were almost his "running mate" as he promoted the ballot question.
The arguments that the treasurer made at the state level might well be transferable to the county level as well. Still, there are some cautionary notes to be heard.
For one thing, the county's reserve funds are small. The account that Treasurer Harnsberger is referring to has something in the neighborhood of $6 million. Wyoming, by contrast, has billions of dollars to work with as it plays the market. That's a lot bigger cushion to absorb the impact if something goes wrong.
Also, Wyoming has the benefit of a panel of expert money managers and professional financial advisers. Good advice also is available at the county level, of course, and the treasurer himself is a knowledgeable and experienced official, but the level of expertise brought to bear as the state looks at investing a billion-dollar account invariably will be greater.
As always, the stock market is riskier than the more stable elements of investing. Historically, that's why public funds have been held out of the broader market. A plunge in value of the sort that accompanied the British "Brexit" vote last summer, or, heaven forbid, the big market crashes seen in 1987, immediately following the 9/11 terrorist attacks of 2001, or the financial meltdown of 2008 have the ability to wipe out staggering quantities of market wealth in what amounts to the financial blink of an eye.
With Fremont County suffering under the energy recession that has slowed the entire Wyoming economy to a crawl, national gains in the stock market are enticing. Later this year we will begin to see how state investments in stocks perform. If they do well, then there will be added power to the argument that Fremont County might want to try a similar investment course. To borrow a term used in the medical community, for the time being some "watchful waiting" would be in order. Let's see how the state's change of plan works before committing a larger portion of our county's money to a similar arrangement .
Finally, any major change in how our county's reserve dollars are handled ought to be presented for approval in the same way the state's new investment strategy was, namely, a ballot vote. Perhaps a year from now, after the new state investments have had a good trial run, we will have more to go on.