you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you Please stand for pledge allegiance. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God, indivisible with liberty and justice for all. Liz we've got administer oath of office for reappointing trustees take care of Hello everybody. My name is Ali Durand. I'm the executive assistant to the city clerk I am have the honor of being able to administer the oath of office to newly newly reappointed member Jerome Fonds. If you could please stand in raise your right hand and just repeat after me. I Jerome Fonds. I Jerome Fonds. Do solemnly swear or affirm? Do solemnly swear and affirm? That I will support the Constitution. And I will support the Constitution. And uphold the laws of the United States and the state of Florida that I will in all respects observe the provisions of the charter and ordinances of the City of Nantes. And will faithfully perform the duties. And will faithfully perform the duties. Of the Office of Trustee. Of the Office of Trustee. Of the police officers. Of the police officers. Retirement trust fund. Retirement trust fund. Thank you very much. Congratulations. Thank you. Welcome back. Give me a public comment. Good. Moving on. Any items to be added? Yes, sir. Okay. Let's do roll call please. For the general pension board, trustee Chadwick. Here. Trustee Dalton. Trustee Chadwick. Here. Trustee Dalton. Here. Trustee Radford. Here. Trustee Thomas. Here. Trustee Whitaker. Absin. Vice Chair Lowell. Absin. Chair Barton. Here. For the police board. Trustee Finman. Here. Trustee Fong. Here. Trustee Pluto. Here. here for the police board trustee Finnman here trustee Fonds trustee Pluto here Secretary Phillips here chair now here for the fire board trustee Hein here trustee Kramer here trustee White's absent Secretary Hoyte here Chair I'm going to approve the minutes. I'll make a motion to approve the minutes. Motion. Go for a second. Second motion. All in favor say aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. Aye. I'll make a motion to approve the minutes motion got a second all in favor say aye Prove will shared expenditures Make a motion to the share expenditures all in favor say aye All right, just have the report. Sugarman and Suscan. Chair, I think we'll move on to Graystone and come back to Sugarman and Justice. You got it. Moving on to Graystone. Thank you. Well, this could be a very short meeting. There's not real a whole lot of explaining to do. We got over 21% for the fiscal year. You guys have all made really, really good decisions regarding asset allocation. We've done it with lower risk. It's been an amazing year. I'll talk about the performance of the portfolio and the managers in a moment. Is there anything that anybody wants me to touch on? I'm going to talk about the market and the economy first. So is there anything interesting I would imagine there's, you know, what I'm going to focus on is looking forward. So this report is as of September 30th and there's a lot of data in there prior to September 30th. It's a whole different world now. We've had an election, we've got a regime change, we'll talk a little bit about that, and what to expect going forward. But anything on anybody's mind, they want me to touch on? I know, and the attachments on the radio, so the four are secondaries, so provided not that they're supposed to be in touch with. Like the events, they. Oh. Give me just a second, I'll get that corrected for you. Yeah, that's true. Yeah, that's not as good as this other other September 30 data David I'll just touch briefly so at the last meeting one of the things we talked about is moving to the new platform, the UMA platform. We're working on the contract with that. Pedro can give you the update when it's for him but we're close. I think there's just a you know I don't think there's much that needs to be done. Once that contract is signed then we're going to set up accounts. We'll do some beta testing to make sure that everything works correctly. So we hope to go live. The goal is to go live on April 1st with that and then that's then that's when US bank would take over everything and everything would change at that point. So getting the contracts, the first step, not the last step. So that's in the works. I'll go ahead and just start talking a little bit, and then we'll get to the number. So the last couple of years, what we've talked about is how concentrated the market's been. Especially last couple quarters, I think the last two meetings, all we've talked about are the Fab5, the Magnificent 7. It was given me a little consternation when you have the most of the market driven by large cap, and then within large cap you had tech and then with tech you had basically five companies driving the market. That gives me a little heartburn when the markets that concentrated. This quarter we saw the market kind of spread out a little bit. I feel much, much better about it and I'm not suggesting that one 90 day period makes a trend but it does make you feel a little bit better about it. When we pull it up what you'll see is that everything did well. And unexpectedly, large cap was the worst performer. Still up, still positive, still good for the quarter, but mid cap and small cap did better. International did better. And then growth has been the juggernaut. Growth valued did better than growth across the board. So you had small companies outperforming larger companies, value outperforming growth. So, but again, everything did good. And then on a sector wise, what you saw was the more defensive type stocks, utilities, real estate, industrials, they all did well. Tech and energy were the two worst performers. Tech was up 1.61% and energy up 2.32%. So you know this it just goes to and then when when we couple that with the fact that two years so right now the market as of the 12 month ending September 30th the S&P is up 36% the Russell 1000s up 35% the growth is up over 42 percent, right? In a year. If this year ends above 20 percent, and it's projected to be about a 27 percent annual return, just the market, it'll be the first time since I think 1985 that the markets had two years back-to-back up over 20 percent. Now, that's really good, but it comes on the heels of 22 when everyone thought the world was gonna end, right? 22 was like, hey, you know, things are panicky. Let's, you know, let's, let's de-risk. And I was, I did that, you know, and then all of a sudden we had two of the best years back to back we've had in decades. So this is why we have an investment policy statement. This is why we have asset allocation. We just never know. We got a good idea. Or we think we have a good idea of what to expect. But you can't put all your eggs in one basket. If we had got extremely defensive with asset allocation and managers in 22, we wouldn't be having 21% returns this year. Likewise, in 21, when tech was going gangbusters, if we had to load it up on tech, we would have, we would have got kicked in the teeth in 22 when the market went down. So this is why we have asset allocation. It's a smoother ride, right? And as we talk about, when you're dealing with payments that you have to make, liquidity needs, pensions, city councils, board turnover, having to smooth the ride is more palatable. If it pleases the board, I'll talk a little bit about what to expect going forward. So we're in a unique position. We have a new regime coming in, and rarely do you, when a new regime comes in, you typically, it gets to the, you don't know what they're going to do, right? But this, we've already seen this story. The Fed has started with the rate declining cycle right now, but with Trump has stated he wants lower taxes, he wants deregulation, those are things that help the economy. The Fed also stated Jerome Powell said just recently that the economy is a little bit stronger than what they thought. The point here is, if these things get put in place that's going to make the economy stronger, the Fed isn't going to have a big sense of urgency to lower rates. So you would expect rates higher for longer. So matter of fact, what we've seen is the longing in the curve kind of drift up a little bit. It went up, it went down, and now it's kind of drifting up a little bit. It went up, it went down, and now it's kind of drifting up a little bit. So the market is suggesting that rates are going to be higher for longer. Keep in mind the Fed only controls the short end of the curve. Basically 90 days and in is what they can control. And they're now saying they're not real sure. Their sense of urgency of dropping rates has kind of waned. So you you know, the other thing that we hear about is these tariffs, right? What's gonna happen with Trump, if he's talking about putting these tariffs on, and that's a big unknown. So, and it's an unknown because we don't know if it's just a negotiating tactic. Is he really gonna do it? Or if he says he's gonna do it, and then they make adjustments that he doesn't have to do it. And so the idea though is this is there's trade agreements in place now that have been put in place since World War II that some of these other countries have an advantage over us and that has helped them rebuild after World War II. And they're still there to this day. Well, they don't need those advantages anymore. And what Trump is saying, listen, you either have to level the play in field so you don't have an advantage, or we're going to raise taxes on you. And additionally, we have our exports. There's lots of taxes on our exports. So he's saying, look, if you're going to tax us, we're going to tax you. Now, as a rule, I'm not a fan of subsidies or taxes, right? It changes consumer behavior, changes market behavior. But if there's an unfair advantage to level the play in field, and if it's a man-made advantage, not a natural advantage like cost of supplies or cost of goods out of the ground or raw materials, not something like that, but a man made advantage, a legal advantage, and that's gonna be removed. I think that becomes more fair. So the point to all of that is I expect there's gonna be a lot of volatility this year, right? We have, there's a regime change. We don't know what this regime, we have an idea what this regime is gonna do. We don't know how going to go. So if the market, if it anticipates a move and then that move Doesn't happen, you don't have to unwind that trade. We see that a lot. So I expect volatility. I do expect that a year from now will, the market Be higher than it is today. So I think it all be good. It's just it's probably a bumpy ride. Especially the first 100 days or six months or something like that. Once all the pieces get put in place, it'll be a little more clear. If we take a look, I'm gonna go right here, we got this pulled up, if we take a look. Take a look at the 12 month numbers right here, it is absolutely remarkable. 36% for the S&P, 42 for the 1000 growth. The worst performer on the page is what 25% in a year. Now this is where it gets interesting. If you go over here to the S&P 500, nearly 6%, that's fantastic. Russell 1000 index up 6%. Value up 9 and growth up 3. So that's a big reversal if you go back and look at the 12 month number, 42% for growth and 29 for value, mid cap, up 9.21, keep in mind, launch cap was up 6, so that's a lot better return and again value up more than growth and then the Russell 2000, close to the mid cap index but value out performing growth. So it was a significant reversal but this makes me feel a lot better because everything was moving up. Now, some of the discussion is, well, why are smalls and mids doing so well? As Ed mentioned, Trump's has stated he wants more deregulation, more deregulation helps the smaller companies. So the market's anticipating that. If we take a look at international, same kind of story. So remember, remember the S&P was up 5.89, the EFE up 7.26. That's the first time in a long time where we've seen international above domestic. And we talked about this. What we talked about is the reason that international had been such a drag, their markets were doing fine, but the value of the dollar had been increasing pretty dramatically, which hurts us as a US investor. It reduces our return. Well, look at this. Look over here at the return in local currency, it was only about 1%. But the value of the dollar came down during the quarter, which made our return go up. And that's what we said. We said, the value of the dollar goes down. It's going to be a tailwind for international. The reason all that took place is because the Fed dropped rates. So the reason the value of the dollar was so high is because we were paying basically 5% for cash. Other nations were coming in and they were investing in our cash. So they had to buy our dollars. It makes the value of the dollar go up, invest in cash. Well, when they start, when the Fed said, hey, we dropped it by half and we're gonna continue to drop it, that trade was reversed, and then the value of the dollar came down and gave it a big boost. Since then, as I said, the Fed is kind of tilting their hand that there's the sense of urgency to lower rates is not like it was. So what you've seen is the dollar creep back up. And so since this, it's been a headwind for international. So the big driver of our international returns has been currency in recent quarters. Merging markets, same story, a little bit better on their returns and a little bit better for us. And then to me, I think the big story is this, the 12 month numbers for fixed income or remarkable cash is 5.63. Take a look at the aggregate up 11 and a half long bonds, up 17%. Again, it was a drop. And since then, rates, like I said, rates kind of went up a little bit, so that's been a drag. But, you know but we have it seen 3, 4, 5 percent returns in bonds and ten- look at the ten-year number, less than 2 percent for bonds. So it's been very, very tough in the bond market right now. It's in the 4.5 range, 4.5 range, and we'll see what happens. And this is what I'm saying. A lot of all these things are kind of interconnected. The rates have an impact on equity markets, borrowing, growth, all of that. So we'll see what happens. If we take a look, I'm gonna dispense with this because this is all data prior to September 30th. But let's take a look at the portfolio. So this is the general, and I'll show you the returns of everyone. Up 21%, 21.68% a little bit behind the benchmark, but again, you know, we have this low volatility, we've got a low volatility portfolio. So when it's up that dramatic, we're not going to keep up. In 2021, 22, when the market tank, we protected. Now, this is when the market's going straight up and it's concentrated. Look at the quarter. It's nice to see that we're actually, some of our managers are actually doing better now that it's what I would call a normal market. Small caps, higher than large caps, you don't have one sector just really outperforming everything. If we take a look and all the portfolios, so this is the general and this is a sense inception. Got a slightly positive alpha. Really low risk. Same thing. It's going to be the same with all three of them. And then we'll take a look at how we're allocated. And all of them are going to be very, very similar. So this is, so as you can, well, I'll mount back up one. As you can see, we're little overweight equities. Everything was in the boundaries of the IPS. We're underweight the alternatives and that's a big function of the real estate. So when you overweight one thing, you got to be overweight another. So we're underweight here. That's where overweight inequities is when you take a look at this underweight and fixed income. That's because we said, hey, we want to have a little more in cash. Cash is paying, you know, 4.5%. So we're in that ballpark. And then within each respective major asset class, there's not a lot of places that were making tactical decisions. Like we're right on top of our targets pretty much across the board. You can see here's our underweights. When you take fixed income and cash and put that together, that puts us right at the target. But everything else is really very, very close. And I think that's prudent where we are. If there's a quantifiable empirical evidence, right now I'm kind of like in, I'm thinking, we might want to think about overweating, instead of overweating a large cap, maybe overweight, mid and small, right? That's an idea. But like I said, one point on the graph doesn't really make a trend. And all of the portfolios are very, very similar. Almost identical. Let me go to, I want to go to this. So this is all three plans. This is the general of the police and the fire. And what you see for the general plan, 6.39, this is for the quarter versus 6.46, for the police, 6.4 versus 6.46, and for the fire, 6.45 versus 6.46. All very, very, very close. You take a look at the one year number 2122, 2122, 2123, and 2107. If you would like me to, I can go through all the managers. I don't really think there's a manager that's given us a problem at this point. Hey Scott. Yes sir. If you were to, you know, looking at what you just shared if you were to exclude for example the impact that we've had on these real stage funds, Turnbull and American Realty, if you were to exclude the impact of those we'd be well above the index that we're trying to shoot for over these time periods wouldn't we? For the entire point. For the entire portfolio. One three five, etc. Right? Yeah yeah for the entire for the entire for one three five, etc. Right? Yeah. Yeah. Yeah for the entire portfolio Yes, because what we've done So that's a that's a great point. I really appreciate you bringing that up John So so you got two ways to really beat a bench beat a overall benchmark through asset allocation and through manager selection Right, so we have defensive managers So defensive managers one of the reason we have defensive managers to protect on the down Well all that also allows you to change your allocations a little bit. You can take a little more risk with your allocation, which is where you get your biggest bang for the buck. We're overweight, large cap, which has been the best performing asset class as I just showed. And we've been overweight large cap for a while, but we cannot get out of the real estate. And so, and not only is that asset class hurting us, but the managers in that asset class are hurting us. We have, we've made the decision to get out. It's just illiquid. So, as a terrible only, right? Not the American core. That's what I'm trying to get at. Well, I mean, you take, here it is right here. You take a look at, when you take a look at sense inception, right, and this is important. You take a look at sense inception, the real estate is up 3.43 percent. In Bloomberg, we took the money from bonds. The bonds is up 1.87%. So over the entire timeframe, the allocation decision has added value. It's only in the last couple of years when real estate's really getting kicked in the teeth, and we haven't been able to get out of it as quickly as we wanted to. Well, it's got to act. I'm just looking, police, I think it's the same for the other two finance. The last five years, American Realtty up 2% net, benchmarked up 2.9. Well, that's real estate. We took the money from bonds. Bond's over the period was up 0.33. So what I'm saying from an asset allocation decision, it's been beneficial. The manager has hurt us. To your point, if you compare to the real estate benchmark. Yeah, I mean, I think once you make the move, you then need to look at the returns relative to the same data. I don't think we can say five years ago, we moved from some portion of bonds to real estate. And let's just keep tracking the bond performance. And yeah, we made our move. And we've lost. Now, good or bad, there's roughly 90 basis points of underperformance. And then I guess Trumbull is negative 1.4 to 2.9 so that's like what five little more little more than 400 basis point yet. So now all of that said I mean our real estate is I think a bigger driver of our under performance I'll come back to it is it's actually the stock portion. I mean the real estate for American realty is 3.8%. It's not zero, but it's not huge either. Whereas in large cap stock space, we've got almost 45% of our money. And although large cap, the benchmark, the market for large cap growth, in particular, has been good for sure. I want to talk a little bit about sawgrass because we've gotten rid of Poland, Poland, but sawgrass for the five years is 15.7% versus 19.7%. That's 400 basis points on 10% your portfolio. That's huge. So I think if we come back to our net experience against our policy benchmark, we're underperforming. I think there's several things. But the most important would be the large weights to a large cap growth where our managers have underperformed. I also think there is room and we should talk about the real estate position and we should probably talk a little bit about the fixed income position. So I mean if part of this is simply, where could it have been better and maybe as part of that discussion, what might we change? I would keep our eye on the ball, which is the stock positions. In order of superior performance, great lakes continues to be great. They had a quarter where they underperformed a little bit, but if you look at their one year, their three year, their five year, they're just outstanding. So we're very happy with great lakes. Speaking for the police, I'm happy we've gone to the Vanguard index for a half of our large cap growth in the quarter that did what the benchmark did. So, you know, we're happy with that. And the third quarter was one where the magnificent seven on a relative basis weren't as strong as they have been over the last two or three years. So we have sawgrass for the quarter doing better than benchmark. pleased with that. But again, I just mentioned a minute ago, their five year record, they've lost 400 basis points to Benchmark. And the three year, it's about even 11.9 versus 12 not bad. The last one year, a big, a big shortfall, roughly 30% versus 42% for benchmark. I mean, so in a year to lose 10%. Those are just the numbers. My concern is this, and I just, I'm not recommending a change. I'm not saying, you know, we've already made a couple of changes to the police with Paul and Chartwell. We retain sawgrass. They had a relatively good quarter and that's good. I'm not suggesting we change them. However, I'm still a believer in the magnificent seven. I'm not making a tactical call. I don't know as much about tech as a real research analyst or a tech expert, but these are very strong companies. Our index fund has amongst the 7 Amazon, Apple, Google, Meta, Microsoft, and Viditya Tesla has 54% weight. And for some people, it's like, oh, that's scary. Well, no, these are really strong companies. If you like, I can speak to their revenue trends, their profitability trends, their dominant in their space. Their space is important not only to America, but to the globe. In cloud computing, never mind AI. We can talk about AI. But if AI off the table, just cloud computing, there's three players. It's Amazon, Google, and Microsoft. They own 80% of the market. It's a highly profitable business. It's a growing business. We've said it before, 90% of computing is still on premises, which means it's going to gravitate to the cloud. The expansion opportunity is fantastic. You've got an allegopoly of really strong players. They're building this huge moat. Every day you pick up the paper, they're investing 10 billion in Italy to build out data centers, you know, 4 billion in India. Who can keep up with these guys? So I'm not saying, and you know, they're, you say, the whole PE's high. Their PE was actually higher two years ago. So if we've made the case on valuation two years ago, what's happening is their earnings, their denominator is growing. And they're sort of like growing into their valuation. I'm not suggesting, you know, double up. I just like a market weight, which is what we did with our index. So we've got for us, the police, half of our large cap growth is in the index. We've effectively got 54% exposure to those seven names via that benchmark that index. Sawgrass has moved from 24% exposure at March 31 when we met with them in May. To their most recent December waiting for those same seven stocks is 32%. So they've added, they didn't have any Nvidia in March. They've added 5%. I give them credit. It's hard for a manager to add after the stock's gone up. It kind of says, well, I miss something. So you either stay put and try to be validated when that stock goes down and you can say, look, I told you, or you can jump on. So they've moved from zero to five percent and the other exposures they had. They're still underweight. So the grand total for those seven names for sawgrass is 32% the benchmark is 54%. So yes, we have exposure, but we're still under exposed. Long, sorry for the speech, but it's an important part of our portfolio. It's a huge part of our portfolio. And I just, I guess I want to encourage us to stay the course. Last thing, bear with me. This is from Bloomberg a few days ago. Let me just read it. It's an interview. It's very short. As a value investor, I have never seen cashm- he's a value investor. This guy is a finance professor at New York University Stern Business of Stern School of Business. So he's talking of Bloomberg television. As a value investor, I've never, he's talking about the magnificent seven. I have never seen cash machines as lucrative as these companies are. And I don't see the cash machine slowing down. To be sure, he's not talking about buying the stock, he's talking about buying the stocks when the price pulls back. So it's, there's something about entry point. But to many bargain hunters on Wall Street, these stocks are part of a bubble that's been years in the making. It would take a lot more than a routine pullback to get them interested. So a lot of people are still in the sidelines looking at this phenomenal growth and saying not for me. This Professor Slash Investor says that these mega caps are insanely profitable and he owns all of them. The companies, as we know, have single-handedly propelled the market forward, but he's coming back to their business models. Their revenues, the expansion of their markets, their profitability, their CAPX, and he's saying, I want to at least participate. We've got some managers historically that have had zero exposure. And anyways, I think that explains a good portion of why we've underperformed our policy benchmark. Not terribly, overall I think we've done a good job, but I would just encourage my colleagues to continue. I'm not talking on overweight. I'm talking on a lever lever exposure or double weight. Just, you can't be absent. You can't be so. So I'll stop. So it's the last piece. I think that's fair. I'm just going to add on between now and the next medium. I'm wondering if we can also take a look at, maybe you can contact American Realtty and find out what the put option is on that, what that looks like in terms of the queue. Just so we can have a discussion about not only that category, you know, possible replacements for that or just some ideas about it, but I think we need to know first of all what it takes to eliminate that option because it looks like the term bull. It's going to take us a long time to get that money, you know. I'm wondering what it looks like for the American really too. Yes, right? I spoke with UBS last week, and we were talking about that. They said, hey, look, the queue really built up about a year and a half ago. And that's when a lot of people put the request in and that ballpark. And they said, we said then it's gonna take about five years to get your money back. And it's a year and a half in. And what they said is we think we're on track. We think the queue will be completely gone in three and a half years. So, you know, to your point, it's going to be a while. And so what we've done, as some of the money when we get it? Because we're getting it back in little bits. And that's why we're underweight real estate. Because we're getting that money back. And so we can either put it in real estate, whether it's a REIT, which was brought up, or some other liquid so we can get in and out real estate investment, or we can put it in the rest of the portfolio. So what we've been doing is decided on a pro-rata basis. That's why we have to slide over weeks with everything. And that's been a good decision just because the equity markets have gone up. That's just worked out well. But to John's point, at some point, as we get this money back, we either, because we have an investment policy statement, we have to adhere to, we have to decide what to do with that money and whether it's changed completely and say, hey, we don't want real estate anymore. We're going to go ahead and just get out of that, put it in something else. Whether it's, I think we spoke about private equity and private credit at some point. We've got, you know, we can do infrastructure, you know, put it in equities. There's a lot of different things that we can do. But what we have been doing is just taking that extra money and putting it in equities. And that, again, that's just, you know, that's, it's worked out well. So, to follow up with both Johns on the real estate, it definitely with the redemptions from, from Trumble, which we're not now doing into American Corps. I do think we need to look at staying in that same sector, but getting possibly moving out of real estate completely just because it takes so long to move out of that. And then in that same space, at least in our investment, if we have infrastructure down there, is that, even though it's not realty, it's in that same sector or in that same space on our third quarter? Alternatives. So alternatives is very broad, right? So real estate's an alternative infrastructure alternative and all alternatives means is that it doesn't correlate with any of the equity benchmarks or any of the fixed in. It's just a different benchmark, right? That's all it is. The infrastructure is actually marketable securities, but it's liquid, but their risk and return profile doesn't match any of the equities. So even though they're publicly traded, their risk and return and correlation profile look different than those. It's considered an alternative. And that's what we were talking private equities, alternatives, private credits, alternative, infrastructure, you know, there's all of these different alternative things that, and the whole idea that the reason you go into alternatives is to give your portfolio diversification benefit. It doesn't correlate, and depending on where you go, if you have something that's risky as a high volatility but doesn't correlate with equities, you would take from the equity part of your portfolio and put it in that. So you'd get a diversification benefit because you're taking from one risky asset to put it another risky asset, but you got a lower correlation. If you really wanted to change things up, you say, hey, I want to take from equities and put into something very low risk with a negative correlation or low correlation. So what we've done, like real estate, had a low risk. We took from bonds and we put in real estate. So over the entire time, it's added money to the portfolio as an asset class, but as a manager, it's been dreadful. Right? So, you know, and the other thing is, and one of the reasons we did that is because of the non-correlation. Reats have been on a tear, but they correlate very closely with the equity market. Reats are the best, real estate is the best performing asset class right now. One or two. In the reach space. At real estate, out of the 11 sectors of the S&P 500, in that right, because it correlates with stocks, people trade it. With what you all have, it's not tradable. So it's appraised value. If we, that's the problem that we're having is we can't just and get out Sogar or chart well or pollen we can't just say you know what this isn't working for us Let's look at another manager and move the money and we can't do that whether we stay in a different We I think that we need to relook at the real estate as a whole Because of the redemption policies We could look at an equal weight. There's an S&P 500 equal weight, not 500, S&P equal weight, weight real estate, rate, that's easy to say. That would give us total liquidity, performance and exposure to the real estate markets we want. And it's also a fairly low management fee, I think less than 50 bips on a read, and probably significantly less than that. But I think real estate is an important place to be long term. And if we can remove the stigma of getting into a queue for six years, I think that would go a long way to helping us match our returns. And plus in the read format, I mean, obviously we can, many of these pay a monthly dividend. We could reinvest that. We can steer it wherever. But we would have liquidity with a phone call. What you currently have it pays about four or five percent so you are still getting that income just so you know but to your point John yeah it's going to be three and a half years to get all the way up. I'm not suggesting move it into equity or fixed but in that in our what's 20% our alternative policy. I think that suggesting move it into equity or fixed, but in that, in our, what's 20% are alternative policy. I think that's what it is just, sir. It's just moving it from real estate to something that the boards think is more liquid and agree with which managers if we need to, whatever that might be in that. Once we get all the facts together, you find out what the retention policy is on that. Maybe have another conversation with Turnbull and see what that's looking like and then maybe we can have a productive discussion next time about ideas. But it would be nice to have that information in advance of the meeting. Absolutely. So we can start doing a little bit of research. I mean, I think Adam, you're bringing up a good point. What we can probably agree on is we don't like the form of certain investments, like closed and funds, where in a bad market or a bad manager, where there's a sort of a run on the bank, it's impossible to get your money back in any timely manner. The fees generally tend to be high, and thirdly, I don't like the transparency and a lot of closed-end vehicles where exactly are they coming up with the valuation for the properties. I kind of call it a desktop appraisal. It's probably a little better than that. So there's a variety of reasons to be, there's been some funds that have worked well, but others were investors of encounter these kinds of problems. So we want to, to the extent, maybe not do that again, and maybe make a change. So then the question is, OK, where do we go? So we want a vehicle with more liquidity. But maybe just as importantly, what are we looking for? Are we looking for income, for instance? Are getting back to a big portion of our portfolio large cap growth stocks? They don't pay a dividend. But they got that appreciation potential. So that's why we like that position. But a fund does well to have some income. And we'll get back to fixed income because that's supposed to be the contributor to income, although in this market. So you could just say, well, let's define the substitute investment more broadly. We want income. And real estate is one way of doing that. But I would say just for fun, think about three areas. These are stock market investments. So you're going to get stock market volatility. Maybe that's not so good if you're looking for correlation and diversification. On the other hand, you're going to get outstanding liquidity. You can buy the stock at 9.45 AM and sell at 10 AM, if you like. And there are three areas that I think you could, if we wanted to, we could call them alternatives. So the one is REITS. And that's a huge market. And that's the way public real estate companies buy commercial real estate. And you can get, you know, our American Realty Fund has 87 properties. Tomorrow we could buy a real-time income which has 15,000 properties. It's a rate that's, for the last, it's a dividend aristocrat. Every year, it's increased its dividend consecutively, annually without exception, over the, I think it's 30 years now. So it pays about a 5.5% dividend. The transparency is quite good. Public investors demand that. That's just one example. You can buy a ton of reats if you like office space. I'm not sure you do now. Maybe you do now because it's reprised. Warehouses, data centers, you retail, you name it. You're a lot of ways to get real diversification and real estate and from an investment standpoint income. Disgots point, the last, it's kind of, I talked about this a little bit in March, April, and since then the REIT sector has done quite well, so is it too late? I don't know if it's too late, but it has run up. That's one area. Real quickly, mid-stream energy pipelines. These are, I'm going to give you three. Reads, mid-stream, and then BDCs, business development companies. All of them are capitalized and structured with certain tax advantages if they pay out a high percentage of their earnings. So the government, the tax authorities basically say to a business development company, if you pay out 90% of your earnings in dividends, you don't have to pay corporate income tax. So I'll come back to that in a minute. But the midstream guys, this would be like enterprise products as an example. They just transport natural gas in oil. I personally believe we're going to need fossil fuels for a lot. Whether we like it or not, for a lot longer than many people expect. The midstream guys are more stable. Their price, stock price, doesn't change much based upon the commodities price, but more volume as long as you're transporting it. And they pay a dividend of 6 to 8%. And then the third area is these business development companies. I think Howard is not here today, but a couple of meetings ago talked about private credit. So business development companies are non-bank banks. Blackstone has a BDC, Morgan Stanley has a BDC main street capital. These are companies that take in proceeds by issuing stock and debt and make loans to middle market companies. And these are middle market companies. Oh, that's more than the third of the economy. These are companies with revenues of 50 million to 800 million. They're just, but they access their loans through these non-bank banks. They're paying dividends of the BDCs of kind of 8 to 12%. So those are three. We can talk about the risk factors as well. Everything has risk. But these are just a little bit, not quite conventional. They're the common denominator of these three as they pay nice income, they have extreme liquidity, and you will have market, you'll have correlation with the stock market. But and I don't know where they we have to kind of think about entry point and how you would construct this. I don't know if there's a fund. I mean there are funds that high income funds, but I don't know if there's concentrated in these three sectors. Anyways, I think those are ideas worth thinking about. Yes, sir. So kind of a follow up on that. Maybe where we move it to is a little later conversation. We're already with the Trumble Fund. We're already in the Redemption Q. So there's really nothing to do there. But maybe if you can have a conversation or where American Corps is as far as, you know, do we, I'm not even saying make that decision right now, but where is there redemption at what is their time frame? I know that they were at the time not in the position that the trouble fund was, but I don't know if they are, aren't anymore. And we would have to start there before we move forward with anything else. And I'm not saying to make that decision now, but we need to know where they are with redemption's time frames before we made that decision. We're going to on a little summary here. What we're hearing is obviously we've got issues with the real estate, but that's no surprise. It's been our position for a while, but it's gonna take a while to get out of there due to its lack of liquidity. As it's fun to become available, as we slowly but surely get out of those, we need some direction as to alternatives for that. And I think what I'm hearing is that obviously there's no reason to jump on an alternative right now because we don't have the funds out of the real estate anyway. So with that said, I think we've got some direction here for Scott to talk to us next time about alternatives as we start to get that money out of those out of that real estate fund and we have somewhere to put it, and then making good use of direction is from the three different boards. Pension funds as to where we might want to put that money as it comes out. Yes, sir. That's what I was just writing down. Just prepare an asset allocation just to show the impact of, if we put it here, this is what it would look like, that's perfect. That's what we'll need to make an informed and educated decision. Does anybody have any other further discussion or questions for Scott? The only thing I would add if we're thinking about retooling, refashioning is I'd come back to our fixed income position. Again, I think our common stock position is the key. We've got to always, that's the biggest part of our portfolio. A second area, even more than the real estate, is our fixed income. We've got 18 percent, 16-18 percent of our money and fixed income. And the managers have done well. This is not about the manager. They've done well relative to the benchers. We have Lumis and we have Garcia Hamilton. But, you know, I don't know guys, it's a conventional thing to say, but your yield to maturity is your total return over the long haul. So today, our Luma's benchmark has a yield to maturity of maybe yield to worse, whatever, 3.7%. In our Garcia Hamilton, it's just above 4%. And I think the Garcia Hamilton was back a year or two ago, still to this day, the short end of the curve was high historically, so we said, let's put some money there. Low volatility, higher yield, fair enough, good move. But I'm just saying going forward, we can't expect much more than 4% from 16% of our money. And maybe we can do better there. I mean, we've been trained to think every pension fund needs fixed income. But what's it going to get us? Now, the private credit getting back to the business development companies, one of the reasons a business development company involved in making private credit loans, they can get a better income is because they're taking more credit risk. So now it's not just the yield curve, but you're adding another 500, 600 basis points because you're lending to a middle market company. It's a different risk. But I'm not content with 16% of our money earning 4%. So with that said, it's a risk reward ratio that we're dealing with here. And obviously we're dealing with other people's monies. We need to stay conservative and certain portions of it. Scott, what's your opinion? Are we too heavy on fixed income at 16%? You have one of the lowest fixed income allocations that I'm aware. There's only like one or two two and those are not pension funds. Those are like health insurance trusts and they're like 15 or 12%. So but most to John's point, most pension funds have 30 right now. Right, it was 60 40 and then what happened is when interest rates when started having to start people started moving into all. So you're seven. So that 20% that we have in all, basically all came from fixed income. We haven't really changed our equity that much. And it was because of what John was saying. As you're getting one or two percent, you look at the 10 year number on bonds, it's less than 2%. You got to get some kind of return from somewhere. And so, but we didn't want to add risk. What I don't want to do is get to hung up in, let's get 20, 30% returns. We're shooting for 7%. That's what we're shooting for. And what this board has always leaned into is let's get 7% with the least amount of risk. It's changed gradually over the last couple years that hey, the state has been made, we want risk in the portfolio. That becomes a board decision over the last 10 years. If you go back to 2000, we came in, we were, I think it's about 6% but the market, when we took over in 2000, the market fell, it was down 20 to 30% for three years in a row. But for that, you've achieved your target conservatively, your goal of 7%. Not market returns, not, you know, the equity markets are up more, absolutely. But that hasn't been the goal. So we've over the last 10 years, I think we're up over 8%. I'll tell you. I'm just looking at the ten year, the ten year number. You're looking at the seven and a half set. Seven and a half percent, a little over seven percent. And that's kind of what our goal has been is seven percent with the lowest amount of risk. By doing any of this stuff, we absolutely can't. We add equities. It's going to add return over the long term. It's going to create more volatility. If you, if you, if you, the 20% that we put in Alts was not for it, it wasn't to beat equities. It was to beat bonds and it has. But equities are up 30 and 40% and those all are up 10 or 12%. You know what I mean? So it's still a low returning part of your portfolio. So you have 37% of your portfolio in low volatility, non-correlating investments that would expect to get high single digit returns. And then you have the remaining party of report, well the 60% 60 something percent in equities, which you would get plus 10% with a little more volatility. So it's, there's not a wrong answer. Well, that's just how much, how much volatility you want on the ride to get to your 7% are, are you wanna shoot for nine? That changes the whole thing. I mean, our target seven, that's our stated target from our assumption rate. We can build a portfolio that says, hey, I wanna shoot for nine, but we haven't done that. We're shooting for seven with the lowest amount of risk. We can shoot for nine with a little more risk. Scott, what ranges do you see in some of your customers that are taking a more aggressive approach in terms of their policy index? So one of the funds I think it only has 10% in fixed income. They're mostly inequities. I mean they're very aggressive. They got 27.5%. Their fiscal year, wait just finished. I think it's one of my highest ones. 27.5%. You guys are right in the ballpark. No, I'm at policy index. That's the average artist what six point whatever. Oh, I'm sorry. You're high. So, so FRS is 6.7 and 7% is I think the average is about 6 and 3-quarters, 7. I mean, it's right in there. Right, so you're right in there. And then at the fixed income policy 17 and a half percent you're saying out of pension funds were one of the lower at that rate. Yes sir. All right. Thank you. But with a 10 year treasury right now at 4.1 4.16 this morning, you know, we do have to look for a couple of black swan events. I mean, in the last 25 years, we've had two of them. And, you know, this is going to Chair Barton's point. You know, this is other people's money. And we have to have a hedge against the downside. 17% may not be enough, but it's a reasonable amount. If you had the fact that you got 20% in other asset, I mean, that, that, that, if you only had 17% in bonds and the rest in equities, I would, I would not be comfortable with that in a pension plan. But again, you don't have 60% in equities and you have the rest of this pretty diverse portfolio. Well, you know, this is other people's money. I love that. I love that. We have to ask, you know, we have, we're producers here, we're trustees, you know, how do we add value here? That's a question. That's our job here to add value. One is the question authority, question assumptions, and I think figure out what our objectives are. Is it to maximize return, is it to maximize the return of this portfolio? You talk about protection for downside. Let me just start a statistic here and I just, we looked up our police, the return since 2000 since we started for the police. Annual average return is 5.57%. That's under 6%. We did that because we've got all these assets we're all over the place and we just have that money in the S&P 500. Just throw that out there. We would earn 7.85%. Our portfolio would be 1.6 times higher than it is right now. We'd be fully funded, okay? You talk about risk, but the risk we are by protecting ourselves, we're exposing ourselves to risk that we're going to underachieve our goals. So I don't think we have a good sense of the mission here, and I do not like our investment policy statement at all. We're a small fund, I think Dan said this a million times. We don't need 15 different asset classes and 30 different managers or wherever we got here. It's just all we're doing is putting money into these small operators pockets. Coming out of our participants and I just don't think, I'd love to go back and rethink our investment policy statement and how we get there and what are our judges is it to maximize returns subject to what you know that's because that's what it is it's going to be subject to what diversification what risk you know what do we get by putting more eggs in this basket versus that basket it doesn't be 500 is a pretty big basket and it's market weighted you know so we're gonna write up with the big companies. They're going to take it further. And we get these things. I don't think we believe belong in foreign equities. I don't know why we're in that. I don't know why we're in real estate. I don't know why we're in these alternative assets. It doesn't make any sense to me whatsoever. And if we think we're protecting ourselves, but what we're doing is actually harming ourselves. And that's, I'm just going to think about that, all right? And I would just, I'm repeating myself from last meeting, but we're all very mindful of other people's money. So to suggest what Jerry has suggested is not imprudent or frivolous. I think it's a sound way of thinking about growing your assets and reducing your costs over time. It does introduce more volatility than a more conservative, so that's a fair discussion. But it comes back to, you know, the black swan and the volatility. I don't want to downplay that, but I think last meeting, we looked at 100 years of stock market history. In stock markets go up more than they go down. And when they go down, it feels terrible. But the reality is for every three up, there's one down for every one down, there's three up. And you can say, yeah, but that's not, that pattern is not going to happen in the future. Well, I think it is because stock markets, we help ourselves. We mitigate risk. We grow capital, we preserve capital, and then grow it. I don't think it's because we have some treasury bonds in our portfolio. That'll help, you know, for three months of a really bad scene in the stock market, because it is, you it is flight to quality. You're going to be the tragedy. But longer term, we've talked about this. What is the best risk mitigator? It's not us. It's the Federal Reserve. They're the first responder. Bad things happen in the economy, the market. Fed steps in big time. Over inflation could be the result, but they're the first ones to answer the call and provide liquidity to markets and markets love liquidity. More, that's the first one. More importantly is earnings. If you believe American corporations will continue to grow earnings, the stock market will grow. Not necessarily every month, every quarter, you're gonna have some down periods. Things investors do get ahead of themselves and overbid certain stocks, but over time, if you've got not only profitable companies, but productivity. Productivity explains stock market, longer term stock market growth. If those things are for real, we're going to be fine. We're going to be just fine over three to five year periods. There's going to be some tough times and maybe some counseling with city council and all the other. I don't know what guarding for a black swan event really means. Does it mean taking money from growth stocks and plunking it in treasury bonds, earning 3.5%. I mean, even in the bad times. Yeah, you know, there's a whole range of risk reduction strategies, portfolio insurance, buying puts, treasury bonds, money under the mattress. You know, no, really, those are all going to perform well in down markets, but there's a price to pay. That's right. And remember our actual, our actual, our actual, our, our down, you know, we've got a lot of things going for us just with regard to how volatility finds its way into the cost of the plan. And I'm not, none of this is to say I don't care about downside. I absolutely do. But we've got to grow the fund. We've got to outperformed our policy benchmark. And we've got to, I just not content with investments that you know won't do better than three to five percent. Well, and I think we're kind of moving in that direction because we are moving out of the real estate funds, which is supposed to be a more conservative position within our portfolio. We're trying to get our money out of there and again that's not a quick fix because it's taken a while to get it out of there. But with that said we are going to have more data from Scott in reference to how and where we might want to put that money and answers to that question might be we want to put that money into a more aggressive position as it comes out of the real estate fund that's underperforming. So I think that we've got an opportunity to potentially do that and put a little bit more weight on the equities side of the equation and not necessarily into the fixed income side of the equation. So again, we can have that discussion with Scott as a group and determine what we want to do with that money as it trickles out of real estate fund and we can say, hey, do we want to put it back into fixed income and grow that 16% portion of our portfolio or we want to put it somewhere else. So I think we've got an opportunity to make those choices and make those decisions with this money that's going to become getting free within that as we sell out of that real estate fund. I appreciate you saying that because if you think about the actions that have been taken, that's exactly what we've been doing. So we're getting out of real estate, we're adding equities. So that's an asset allocation decision. We could have put it in fixed, we're underweight fixed right now. We put in equities, we're overweight equities. Within equities we've moved into passive investments. So we're adding risk to the, and that was the statement that was made. We want to add risk to the portfolio to get a more return. It's all happening. Well for the record, I don't know if we've added risk. We've made, we've fired a couple of the police, a fire two active managers and moved into index funds, but we didn't increase the allocation. So actually on the margin, that's probably slightly less risk. Is that where you're referring to? I think, but what's, you're putting real estate money right now is going into equities. I think I heard you say that a few minutes ago. So right now, we haven't decided that, right? I mean, we're talking about that. No, no, no, no. Do you mean the trombone money? Yeah, that's why we're overweight actually. Sure. So we're adding risk. Yeah, and that's been like a percent of the fund, right? I mean, I just, it's everything. But yeah, I'm the margin, yes. OK, understood. And it's all we can do. I mean, it's 100 percent we can do. And then, going into, I mean, I think the statement was made somewhere. I don't remember who made it. We want market beta. We don't want the low volatility management. That's adding value. That's adding risk. And an up market is going to have a lot of return. So all those things are being done in removing in that direction. All right, that sounds good. Anybody got anything else for Scott or any further discussion? Real quick, I just want to go back to the Salgrass, at least for the police. I've been on this board more than 10 years now, and Salgrass has for 10 years, woefully brought us returns below index where they should be. I'm getting to a point now with Salgrass, where I would really like to see maybe a manager selection looking at some new managers to take over for sawgrass. I just don't think they're going to be the right fit, at least for the police pension. So last time with the police we put half the money in a passive investment. So you kept the passive investment which is the benchmark and you kept sawgrass. So before decisions made and it's an easy fix to get rid of sawgrass, we put it all in a passive investment. Here's let me I just want to talk about some percent. So what we've talked about is maximize in returns. So what we've talked about, the other side of that coin is mitigating risk. I'm not I'm unbiased. I don't care which way I just want to put it all out there. So, sawgrass has 25% less risk than the benchmark. And it's only given up 15% return. But I'm going to interrupt because I always interrupt you at this point. When you say less risk, that means in up markets, saw grasses underperformed, i.e. lower volatility, therefore they get a cookie. Well, let me see. Yeah, no, let me see. Let me see. Let me see. So that's how the formula works. That's how the risk adjusted calculation works. That's right. But they also get a cookie when the market's down, 30, and they're down 10. Right. But stocks are up three times for every time when they're down. Never mind not just market, but to Eric's point, even relative to benchmark under performance. So when you look at the up capture and down capture, it's 84 and 80. It doesn't go up as much in up markets. It doesn't go up as much in up markets. It doesn't go down as down markets. John's saying, well, it goes up three. You're only getting one benefit because out of four times it goes down one. It goes up three times. You're only catching 84% of the upside. When you take all, and I think at the last meeting we brought in what we call a sortino ratio. Now we're getting into some really cool stuff. And basically, no one cares about the volatility on the upside You can go up all you want. It's that downside protection. They had a positive sortino. They have a positive alpha They have a they have a positive sharp which means they're more efficient than the benchmark It doesn't mean they get a higher return means they're more efficient than the benchmark the question is very simple If you want a low risk large cap manager, this is a good manager. If you have a low risk large cap manager, you're going to give up upside potential, which is the point you just made. If we look at them over, the only time frame where they've outperformed is in the down market. If you look at the three-year average, which includes 22, they outperform. They have a higher return. They've outperformed over the entire time because they will tell you and saw grass has been in here and they will tell you they're not trying to get a higher return in up markets. They're there to manage the downside risk. That's what they'll tell you. They say eight out of times, and if the market's up over 10%, eight out of 10 times are gonna have a lower return. Okay, he's got that being the case, wouldn't you then consider them more of a large blend? No, no, they're in the growth space. I know that I'm wondering how that looks compared to the S&P 500. There, so there are squared, which is a measure of how well they look to their respective benchmark is 91, which is I don't know what it is against the S&P 500, I'd have to look. But so the point becomes this, if you want a manager that's going to get a higher return, sawgrass isn't your guy. They're there to do that. I don't think everything that we've talked about, I think it's going to be very hard pressed for an active manager to beat a benchmark. Because it gets concentrated and no manager is going to have that. They might have it over a couple quarters or a year, but we've said, and it's why we went passive here on a just a return basis, not a risk basis, just a return basis. It'd be very difficult for an active manager, net of fees and transaction costs, just on return basis to beat the benchmark. There's only, there's a half a dozen of them right now. And if the market continues, if everything that we talked about and the AI and the globe and all of that, if all that keeps going about and the AI and the globe and all that, if all that keeps going up, it's just, I don't think the managers are gonna, they're gonna be at or underweight those things. And that's what, if a manager's underweight something that's up 200%, they're gonna underperform. Sawgrass, every bit of their underperformance is because of their underwates to those that mag 7. Every bit of it. That's, and they're not, and they will tell you that. They're not, they're not making an excuse. They're saying, hey, we don't want that weight. And they've said that in this meeting. So the question then becomes, do you want that or do you not? And it's, I mean, we went half of it, past it last time, and Poland was supposed to be the return enhancer, and that's why we did that. But if you're saying, hey, let's just jump ship now and move out of sawgrass into the benchmark, because that's, I don't wanna say, everything that we look at is on a risk adjusted return. Are you getting paid for the risk you're taking with sawgrass?, yes you are. Your return's lower, but your risk is lower. You're not going to get that return. But if you're saying look, to heck with that, we've got a diverse portfolio. We've got a five year smooth. We've got all these other risk minigunters. 50-year horizon. 50-year horizon. And I agree it's actually a perpetual horizon, it's not even a 50 year horizon. Right, particularly for you guys, because fire is the youngest of the people here. The general is the oldest. You guys have the longest horizon. You should be the most aggressive. So the, and I would agree with that on a personal stance. However, we keep on talking about other people's money and it is other people's money, but there's six people on this board that it's actually our money. And there's seven people that sit here on Mondays and Wednesdays that decide on how that's paid out. And I'm not willing to waive the risk because it's not, it's other people that are making decision on how other people receive that money. And they're looking at the risk. It's not, unfortunately, that's just the way it is. And those seven people change, nothing against the ones here, we appreciate everything that everybody does. But every four years, every four years that changes, based on an elected slide. And I know if it's a down market and the members of the city that are running for council are responsible for the fund of the whole city. They're the sponsor of the plan. And so that's why I personally, Scott, you're in there to look at the risk. And I agree with some of the money people here in the room that it's common sense, and it's a perpetual fund for hundreds of years because there's employees coming in all the time. But we have to take into account the risk because there are other people that are making the decisions on how other people receive the money. And it's kind of complicated, but that's my point on that. Eric, would you be comfortable with moving sawgrass into the Vanguard index? We did that with pollen. We're going to get the benchmark. No more and no less. I mean, I'm, or are you looking for an active manager that is going to do what we wanted sawgrass to do? What, wait, so what do you want saw grass to do? Well, maybe I should not. I guess, I guess if saw grass said, we will never outperform up markets. I probably wouldn't have hired them. What he said, they said eight out of 10 times when the markets above 15%, eight out of 10 times are not gonna have the return. Now, you know, they got a 30% return. It's 1200 basis points below benchmark. It's 30 but it's still 30%. That's real. What are the comparable managers? What are the returns based on that though? So it's been the last three or four years. Like I said, there's just been a few that have beat and that have beat the benchmark and when 22 happened, they were down 40 and 50%. So they went down, they're more volatile. So when the market goes up, they make more, when the market goes down, they lose more. So that's what you're gonna get, unless you get the benchmark, and the benchmark is you're gonna be right there. Well, Scott, I think you hit the nail on the head. It's hard for any active manager to be 50% in seven stocks. I guess what I'm saying is that may still be wise and prudent. I mean, these companies, these magnificent seven, I mean, they've got profit margins 50 to 80%. Amazon, four years ago, their revenues were 280 billion. I mean, they've got profit margins 50 to 80 percent Amazon. Four years ago their revenues were 280 billion this year 620. Someone's buying their products. Someone thinks it's important. Someone's willing to pay 30 percent profit margin to them. Google's revenues were 180. They're now 340. Nvidia 10 billion now 100 billion. I mean, this is not the tech bubble of 2000, whatever it was. and Vidya, 10 billion now, 100 billion. I mean, this is not the tech bubble of 2000, whatever it was. These are real companies with modes. Allegopoly pricing power. So I'm for being long with some portion of our portfolio in these names, and you're going to get that with a benchmark. And I think Scott's point, I think most active managers in large cap space, you know, maybe they'll think a big exposure is to be three quarters of the way for each of these companies. Ensemble have zero, which is why we fired Paulin. We looked under the hood and you don't own any of these companies. Well, and Paulin was supposed to be the return enhancer. And they weren't doing that. They weren't supposed to be the risk mitigate. So now, maybe we go slower with some of the other things. And then maybe we should also think a little bit about timing as well. Maybe we have this in mind. And we wait for the magnificent seven to go down 5%. It's going to happen. And then you're all great by the dip. Move from, I don't know how quickly you can implement the sawgrass fire. So once we get to the UMA, it's overnight. Yeah, that's in April. So one of the things what I've said all along is after the fall, that's when you go passive. If you have a manager like this and there's a bad economic, they're going to help, right? They're going to help. All the data shows, all the data shows is over, let's call it a hundred-year period, I don't know, that's exactly right or not, that half the time active does better, another half passive does better. It's about 50-50. But what you see is passive does better off the bottoms and active does better off the tops. Mark a timing never works. Mark a timing never works. If you're going to do it, do it. I mean, if this is a long-term goal, you do it. And, you know, okay, they do too because when the mag seven comes down, everybody's going to panic. Oh my God. This guy is falling. And what's the date on that? Yeah. That's next Thursday, about 11 o'clock. So if you're going to do this, you do it. You know, this is how you feel. I mean, I agree with Adam and with his statements he made, you know, and Council does base a lot of their decisions with our pension on risk. There's a few board members who are sitting around the pension board that understand pension, but there's another few members who just don't understand pension and just look at a couple things that they understand and they make their decision based off of very high level things, not looking into it. I mean, I get it. It's a matter of roll and dice. Are we gonna have a low? When are we gonna have the low? Is the low gonna be during contract negotiation when we're trying to enhance anything? Then we're gonna fall in maybe to a 2012 situation where we lose money, we lose pension benefits again. Those are all things I try keeping in mind as well and Adam has a great point. I don't want to ever put us in that situation again where we end up as members losing benefits. I mean, my personal life, you know, I got, you know, my stuff in Fidelity 5 and it's running crazy right now. But I mean, for everybody else, am I willing to make that? I think that's really the crux of the issue here. Again, I'm going to focus on other people's money, and that is my tendency would be to air the side caution. We got 30% and I realize it's under the benchmark but guys it's still 30% right I mean you know I've got a wonderful Jeep Grand Cherokee out there and I pull it next to a guy that's sitting in the the four-wheel drive Mazra Audi and I'm like dang you know should I really be upset that he's got a Mazra Audi or should I be happy I've got a great four Jeep Grand Cherokee out there. So I mean, it's tough to sneeze at the 30%. And again, when we're dealing with other people's money here, my tendency is going to be air inside the caution. And I don't think we've been way too conservative by having money in sawgrass. It's going to be a little bit more conservative than the benchmark. I'll be going to continue to crank up these numbers and I realize that statistically speaking we're going to have, as John had mentioned, three up and one down. I get that. But again, we're dealing with pension plans here. And as you just mentioned, again, not everybody has the benefit of having money elsewhere, but you've got money elsewhere. Because we've got a pension plan and maybe we're airing to side caution and being a little more conservative, that gives you the opportunity to be more aggressive with your personal money. Right. You know, so I mean, you don't want to be aggressive with all your money. So if it's let the pension be the more conservative portion of your personal portfolio and you can be aggressive with your other money. Now again, I realize not everybody has the opportunity to invest elsewhere. But with that said, if we're dealing with other bills money and especially if somebody doesn't have the opportunity to invest elsewhere, we need to be very, very prudent with their money in these plans. And again, my personal opinion is air to the side of caution not be ultra conservative, but to accept a 30% rate return on a more conservative fund and be happy that we took some caution with that and we still ended up with a 30% right to return over the last year. This is the first world problem. We're sneering at 30%. And echo what Chair Noah said. As one who has testified, I'm not sure that's the right word before council about pension issues and one who is sat in on fire negotiations. We do have to answer the council. We have to be cognizant of what they think. And the questioning I received when interviewed didn't show a great deal of financial expertise. When I had to define what inflation was to a council member, I'm thinking this isn't gonna be a good day. So, you know, and I know how frustrating it can be for the union members because listening to their frustrations, you know, these are real issues. So I'm just throwing that's just my two cents. Yeah. Yeah, I'd like to just make a comment. This is, I think this is such a great discussion that, you know, 30% is just awesome. You know, anything of a 10% is killer. But, you know, we have such individuals on the board now with expertise, and I think it's extremely healthy that we listen and that is going to help redefine kind of the way that we look at things with the act of against the passive. And we have to remember that it's our job to manage money. It's Council's job to decide what they do with the money. So in the more money we make the better decisions and the better for all the pensions will be for all three boards So but but I really think it's great with with Jerry and and John and John and all John's That we just we keep that in mind and we don't get get to Tunnel vision on the way that we've done things and we we try to expand our Our vision of where we can go in the future. I'm gonna throw us out there as a new elected guy and I agree with what you're saying. It's shocking to me of course coming from education where we live in the pension world, right? And it's wise to teach her how folks who aren't from that world have no idea what it's like to be the recipient. I also want to say, you know, when I was head football coach and I got 25 seconds to call a play and I got six guys talking to me about what the great play is. And when we're up by 14, everybody's got to play. And when we're down by 14, crickets. So everybody's got a great play right now. That's right. And the coaches will fuss about that because somebody's going to jump off sides on our side. But having said that, I can't speak for everybody in the council. They're my senses. Whatever we're doing, there better be some part of it that appears or that actually is a hedge against down times. Whatever that looks like, you better have some part of we're being conservative, we're anticipating the market's volatility and we are going to hedge for that. Because they might not know nothing but they think that's important. So for whatever that's worth and however we shake that and I think REITs are, I think it's brilliant. I know we got upside down in the real estate for all the reasons that we don't need to get into. I'll also say personally as a pension guy, I took it a lot of some, I don't want them giving me a pension. I'm gonna manage my money. So I took that option, okay. Full disclosure. Well, I mean, thankfully I've got family members to do that. But a point is there has to be some conservative, some defensible conservative position for to be palatable to people who sit up here in my days and Wednesdays. That's all I'm saying. So for whatever that's worth, however that helps, I can tell you that. Yeah. But pretty good, certainly that's where it, however that helps, I can tell you that. Yeah, but pretty good. Certainly that's consensus. I appreciate what both of you guys had to say. I'll retract my, let's look for somebody else. I think you guys are so mean. You know, this great thing with conversation, you bring light to all these subjects and it gives us a chance to kind of think out loud and figure out really what the right thing to do for the whole is and Well, another hedge against Save the Russell 1000 growth would be the Russell 1000 value. I mean you cut your expenses You capture all the value plays Growth and value rarely Our correlative. Wait, John. I'm going to interrupt you. For us, our growth is eight basis points. That's the Vanguard index fund. The Great Lakes is 27. I don't know if those numbers change when we move to the new format. But just with regard to, we wouldn't cut expenses. I thought I heard you say we cut expenses if we move from growth to value. No, no. If you went from a managed growth like sawgrass to a value index, you're going to cut expenses. I don't know what I think. Oh, okay. Sure. Yeah. I mean that's okay. So if you wanted to hedge the Russell 1000 growth, you could use the Russell 1000 value. So you're lowering correlation. You're certainly lowering expenses and you're capturing the market. I, well, for police, I wouldn't reduce our large cap growth. I think the question is simply we have a passive manager and active manager in that space. Eric suggested 20 minutes ago maybe thinking about the active manager, but now we'll just, for the moment we'll leave it alone. I think overall we could just what we have today, we could defend this as a prudent, I don't know if it's overly conservative, but I don't think it's overly aggressive. I mean we've got, you know, 65% in domestic stocks, we've got 16% in fixed income, maybe a little lighter than other pension funds, but it's not zero And then we've got you know the various alternatives I agree with you there I think our Allocation is is pretty solid and I think we can defend Either side of that position, so and I think that's where we need to be. Again, I need to be. I hear you. We need to have prudent managers up here. Prudent beneficiaries up here making sure that we can defend both sides of that coin. Are we aggressive enough? Yeah, I think we are. Are we too aggressive? No, because we've got X, Y, and Z over here in the more conservative side. certainly can defend that we are not too conservative. Again, I think that we've done a pretty good job in all three of them to make sure that we've got defendable positions. And also, at same time, making sure we're in a position to take advantage of what's happening in the marketplace. And obviously that's why we've got Scott here to get us direction and feedback. And I think we've got some good discussions here today. And I think we've got some good discussions here today, and I think we've got some good direction for Scott for our next meeting in reference to where we're gonna be allocating those real estate funds as they come out, as that money becomes available. And again, that'll reopen our discussion in further our discussion that we had here today as to how our allocation looks with that money as it becomes available. Do we get a little more aggressive within? Maybe, and we'll discuss that and see what's prudent and what makes sense for all three. So if anybody doesn't have anything else for Scott in reference to that, I think we've got some good direction for you. Yes, sir. I got my motion orders. No, good. You guys have anything further for Scott? Nope, all right, good. We're gonna close this portion. We can jump to this list of the showroom and report. Verpedra, thank you. Yes, sir. So really just two things to go over with you. Nothing necessarily actionable. First, I'm not sure if you've had a chance to take a look at the special report that we prepared. But essentially there were two changes that were made by the floor legislature last session. Excuse me, they became effective July 1, 2024, and then in part next summer, July 1 of 2025. First, the chapter 287 was amended and this is a statutes and type of foreign countries of concern. And so when you hear that, it's the usual suspects that you would think that would comprise such a list. So the state has identified Russia, North Korea, China, Syria, Iran, Cuba, and Venezuela as countries of concern. So going forward as of July 1st, any government agency, IER pension fund, that enters into a contract, the counter party to that agreement, the company business entity person that's signing that agreement needs to attest or affirm half of that company or entity that it is not a company of concern. There's a lot of air quotes in my presentation today. So a company of concern is essentially one that's either owned and operated, domiciled in, one of these aforementioned countries of concern. And so even though it's not necessary, again, it's we all have existing contracts. We've drafted an affidavit for all of your existing providers to sign off on. So ourselves, Greystone, you're actuary. And so we'll all attest to the fact that we are not companies of concern. And then more so, next summer, there's an additional requirement that a governmental agency can no longer extend, renew, or enter into an agreement with potentially a company of concern if you already had an existing agreement, if that company of concern does not attest to the fact that it will not receive or share any personally identifiable information. So again, I don't suspect this will be an issue operationally for these plans and for our vendors, service providers, your vendors, your service providers. But nonetheless, we'll address it obviously and ensure that we're compliant with the state law. So we have the affidavit now and then going forward, any new contract that you enter into, it'll be a term in condition with the affidavit attached as an exhibit. Okay? And then similarly, chapter 787, this is the human trafficking statute here in the state of Florida. Obviously, in an effort to further stem human trafficking. Similarly, governmental agencies entering into agreements. The counterparty must affirm or attest to more air quotes. The fact that it does not use coercion for labor and or services, and the statute goes on to define what that means, right? Well coercion is defined or means kidnapping, physically restraining, using debt to create this kind of indentured servitude type model. So similarly, we drafted affidavits. We'll have all your current providers sign off a testing to the fact I won't share it with my associates. We do not use coercion for labor and or services. And then we'll have it as part of the agreement going forward. Okay, I was just kidding for the public. Just a bad joke, right? Okay. Anybody have any questions or further discussion for Pedro? Okay. And then the only other item I did want to just really briefly go. I know everybody here is varsity at this point. So I usually take this December meeting to give you a five minute refresher course on your ethical responsibilities By virtue of your service on this board. You are technically considered a public official obviously by the nature of your other lives You you already heard this. I'm sure for our two commissioners, but Just really quickly if you do receive something of value, anything of value during this gift giving season that you believe is being given to you in some way shape or form, to influence your decisions on the board you should obviously reject that. If you're given something as valid $25 or less, you can accept it, no issues, no reporting requirements, anything valid between $25 and $100. You can similarly accept it, however there is a reporting requirement on behalf of the gift give-or, right? The person company who gives you the gift. And then lastly, anything $100 or more, you should not accept it. And we always recommend filing with your clerk's office or the state, essentially just advising that you receive the gift, who gave you the gift, the value of the gift, and ultimately the disposition, right? What you did with it. You returned it to sender, you donated it, whatever the case may be. Okay? And then lastly, just kind of dovetailing off of that. Historically, we did provide holiday gifts to all of our clients. They were always less than $25. But since COVID, we kind of had to pivot away from that for logistical reasons. And since then, we've been making charitable donations in each of our clients' names, so we'd like to continue that practice this year. We always or we generally will make donations to local food banks around the state. Also in light of all the storms, last couple of years, hurricane relief efforts. Those are, we've kind of surmised, those are fairly non-controversial, a political organizations for the most part. You'd be surprised, but for the most part. So with you all are comfortable with that, we'd like to continue that practice this year. Again, no action required on your end, just wanted to run it by you and let you know that we'd be doing that again. Wonderful. It's fantastic. It's a great practice. We certainly appreciate it. I'm sure nobody else here has any objection to that. I think I'd pay draw anything else. Nope. That's it. Thank you. Thank you so much. Thank you for paying for the general employee pension board? Do we have approval of retirement applications? We're still in joint. We got to close that out. We'll just move to correspondence. And I just wanted to bring to your attention under correspondence. I do have a memo in there with the dates for next year that we have so far for the meeting schedule and also For the training opportunities that FPPA has available if anybody is going to be interested in that Please let me know the next conference for FPPA is January 26 through January 29th 2025 And that's in Orlando. It is. OK. Wonderful. All right. Everybody's got that? Sorry. On the somewhat similar. Do we have another meeting next Friday? I did have that date reserved for the actuary, but I think we're going to have to reschedule that. OK. So we don't have our valuation. We don't need to plan for another meeting this year. Most likely now. Maybe. Yeah. Okay. Okay. Thank you. Are any other general correspondence or announcements from anybody? Good. Can I bring this one to adjournment and move on to the next? Yes. Do we need a couple minutes, Ali? Yes, please. Okay. Let's maybe take a five minute break. Yes, you got it. Find me a break, guys. you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you you Thank you. Thank you. All right, guys. We're moving on to the general. Thank you, David. Thank you, David. We're moving on to the general employees pension board, the trustees section here. Do we need to roll call again? Yeah, please. Thank you David. Thank you David. We're moving on to the general employees pension board. The trustees section here. Do we need to roll call again? Yep, please. Trustee Chadwick. Here. Trustee D. Dalton. Here. Trustee Radford. Here. Trustee Thomas. Here. Trustee Whitaker. His absent. Vice Chair Loll. Absent. Chair Barton. Here. Thank you. Do we have any public comment? No, sir. All right. Wonderful. Any items to be added? No, sir. Okay. I would be moving on to approval of retirement applications. There are three for your consideration. You want to give us those? Sure. We have Lou Forster, William Hamilton and Keith Poloski. Two of them are deferring the retirement, but one will begin retirement on February 1st. Okay. Can I have a motion to approve those? Motion to approve. Second. Second. All right. All those in favor say aye. Aye. Aye. second all right all those in favor say aye aye aye and how about approval of return of contributions there 12 there for your consideration I can read the names that you great please thank you we have Phil Dodd Billy Billy Dominguez, Abel Gonzalez, Malena Jean-Louis, Michael Lee. Not really sure how to pronounce this. I'm sorry if I butcher your name. I'm Maine, Mock, Jason Myers, Fliannardo Sanchez, Garrett Rex, David Rosales, Omar Vargas, and David Zorns. Thank you. You can have a motion for approval? Motion to approve. Second. Second. Great. All those in favor? All right. All right. Thank you. And Pedro, do we have anything, in addition to what you've already provided? No sir, nothing to report. All right. Anybody, I have any correspondence announcements, communications? All right. Good. I think't have any correspondence announcements, communications. All right, good. I think we're adjourned for this one. Can we move on to the next one? We just need a couple of minutes. Yep, I think we can. All right, keep going, wonderful. Jump over, we're going to jump right into the police and fire pension board of trustees. Can we do any roll call? Yep. please can do no roll call. Go, you may jump on. All right, so please fire fire's pension. And we have a roll call, please. For police, Trustee Finnman. Here. Trustee Fonds. Here. Trustee Pluto. Here. Secretary Phillips. Absin. Chair now. Here. For the fire board, Trustee Heins. Here. Trustee Kramer. Here. I'm sorry. Chair Nadelman. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. Chair. And that completes roll call. We have no one in the audience for public comment. List, we have anything to be added. No, sir. And then for approval for time applications. There are none at this time. There are none at this time. And then return of contributions. We have for police. There are two. Let me go. Eric? Yes. So police, we have two. Can I get a motion to approve? Motion to approve. Second. Second. All right. All in favor? Aye. And it passes. And so that passes unanimously. Pedro, do you have anything for police and fire? No, sir. Perfect. And then no further correspondence communications for police and fire? Those are perfect. And then no further correspondence communications for us, Liz? No, sir. All right. And that will adjourn the police and firefighters pension board. Thank you. Thank you. you you