Friday, June 17, 2011

No news is bad news

by Bethany Hansen

As a part of my MPA studies, I took a class called Cash Management. Our professor, at least once per class, would talk about the importance of following the news because world events affect financial markets. As future government employees, it was important to know how those changes in the markets would affect government cash flows and investments.

Most small municipalities are unlikely to invest money on their own, but those that do, as well as those who manage state pools, should be aware of news that could affect tax revenue or investments. For instance, bad news about the economy sent the stock market into a decline. The decline is discussed here.

When news of a struggling economy affects the financial markets, government officials at all levels need to ensure that the public money they have invested is in the safest, most sensible investments. This could mean moving investments themselves, or contacting their investment managers to ensure the money is safe.

Public monies should be handled with special care. One step government officials should take to ensure that care is by understanding how world events affect their investments.

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