Rowan challenges the forty-year assumption that private markets are inherently riskier than public markets.
“The disconnect in people's minds of private and investment grade is actually funny to watch sometimes, because we've grown up with forty years of thinking that private is risky and public is safe.”
Rowan argues public and private markets both contain risk; the key difference is liquidity, not safety.
“What if private is safe and risky, and public is safe and risky, and we're talking about differing degrees of liquidity in different markets? I think that's what we're seeing.”
Rowan criticizes forcing $12-13 trillion in 401(k)s into daily liquid index funds for fifty-year periods based on flawed assumptions.
“we have 12 to $13,000,000,000,000 in 04/2001 and we're forcing these really long term investors to own daily liquid index funds for a period of time, fifty years.”