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Editor's Corner: Think Outside the Box

As a "first time" Editor of the Stable Times Newsletter, I decided to look back through the few years of newsletters to get a feel for how I should write the Editors Corner. Rarely do I take time to reflect and look back, but in doing so I realized how much has changed and how much this industry has progressed. This of course has not been without surviving some trying times, but, as they say, "No Pain, No Gain."

Over the past five years our market has gone through a frustrating period as we helplessly watched cash flow flood to equities. It was a difficult time, but it gave us time to reflect, regroup and "think outside the box." As a result, I think we, as an industry, are better because of it. We have created a host of new products, successfully entered several new markets, banded together to create a very capable Association, which continues to be a united voice delivering the message of stable value to vast and varied groups of people. Stable value has gained significant strength and is well positioned to face the challenges ahead and make great strides in the coming years.

In this issue we have several articles that highlight the sentiment described above. Allen Fen, from Fen Associates and Gina Mitchell from SVIA, review SVIA committee infrastructure. Many members contribute a significant amount of time, resources, and motivation, all of which are critical for stable value's continued progress as a recognized and respected asset class. This article highlights each committee, its members and the key responsibilities of each group. In future Stable Times issues, we will be asking a different committee each quarter to highlight their initiatives giving membership a more detailed understanding of the Association activities underway.

One of the challenges on the forefront is "Asset Allocation Models", which with out question will impact stable value either positively or negatively in the years to come. Sean Hanna from 401kWire contributes an interesting article covering the key players in the market, a historical overview of the business and a status update. Victor Gallo, from Jackson National sets the stage and explains where stable value fits in and why models are so important to our market.

Randy Meyers joins us once again with an article that reviews the growth of the Brokerage Accounts within DC plans. Randy interviewed plan sponsors, discretionary managers and issuers and gives a comprehensive overview of the issues and attitudes.

Greg McGreevey contributes the first article in a series of three, which highlights the results from a survey conducted at the GICs '99 conference held in Phoenix in April. The first segment looks at conference attendee's outlook for growth in Stable Value and other related markets over the next 5 years. In future issues of Stable Times he will present his findings on Underwriting Issues and Investment Allocation & Analysis.

Also in this addition, Jeff Norris from MetLife provides a thought-provoking article that pushes the envelope. He explores the idea of adding equities to stable value portfolios, which may require some of us to "think outside the box". In the past this concept has made me a bit uncomfortable, but Jeff presents some compelling arguments that are worth consideration. We'd like to know your thoughts in the next issue. Agree? Or Disagree? Contribute a counterpoint article!

Last but not least, Dan Libby from IBM contributes an article that explores and evaluates the relative value of the traditional GIC sector of this market. In this ever changing marketplace, where there are now a myriad of products to choose from, its somewhat comforting to find that traditional GICs continue to offer solid relative value as they are the foundation from which this business was built.

Well, read on, push ahead, and continue to "think outside the box!"

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