State Investment chief Clark doing a good job in a risky, volatile market
I’ve been seeing stories during the past couple of days about the investment performance of South Dakota’s State Investment Officer Matt Clark. Some people think our State Investment Council, which Clark heads, hasn’t done as well as it could in the management of the nearly $21 billion that the Council oversees. That money is the combination of South Dakota state trusts, funds and the state retirement system. The retirement system accounts for about $15 billion of the total funds in the Council’s management.
So what’s the beef about Clark? His investments haven’t done as well as some of the headline financial indices, like the S & P 500, during the past few years, therefore he might not be worth what we’re paying him.
I disagree.
Why? Well, remembering that our state retirees depend on the regular checks they get from the system that the Investment Council manages, I say those hindsight-ed complainers should step back and consider the big picture. I admire the way Clark has been doing his job in the highly volatile markets of last year and so far in 2026.
Instead of chasing the crazy ups and downs of the Trump era’s stock market and trying to outguess its wild swings, Matt Clark’s steady-as-she-goes style fits the needs of a retirement fund and has gotten respectable returns.
And who am I to talk?
Well, I do have some background on the subject. For a little over a decade I was a member of the Chicago Board Options Exchange, where I was on the trading floor making markets in any number of the stocks and indexes that you see published in the financial pages every day. Then I spent another decade in a commodity futures brokerage that I founded in Rapid City, where financial instruments were a part of the mix of investments that we brokered and traded.
Like everybody in the trading biz, I made a living by assessing and acting on risk, volatility and historic valuations.
And it’s on that last aspect, the one about valuations, that I base my support for the kind of returns that Clark has been getting. Yes, he’s been underperforming the stock market “benchmark” during the past few years, but you have to consider that the market has been trading at high valuations with significant volatility. Valuations are so high that no responsible money manager – particularly a manager who’s held accountable for the safety of retirement payments – can heavily invest in stocks.
According to KELO-TV’s story on the matter, one of Clark’s critics, Rep. Scott Odenbach (R.-Spearfish) compared the S&P 500’s gain of 17.3% during the past 12 months with the South Dakota Retirement System’s gain of 6.3% during the past nine months. I get Odenbach’s frustration, and if Clark were managing my money I’d be disappointed too — and thinking about switching to another financial advisor.
But Clark is managing the public’s money. He has to look at the valuations of the public’s investments and assess the risk in them before buying into them, and the stock market risk level right now is noteworthy. About the current market-cycle’s risk, the widely-followed analysts at Morningstar write that “history says there's a good chance we haven't seen the stock-market lows yet.” Morningstar might be wrong, but they do call attention to the risk in the market. Would I put my money in stocks now? Maybe. Would I put someone’s retirement money in them?
Are you kidding? No way.
You’ll have to wade through some jargon to get this, but believe me, the S & P 500 index is at historically high levels right now. The index is trading at around 30 times earnings, versus a historical median of 18 times earnings.
This shouldn’t scare away speculators or others who are trading for themselves. They follow their own metrics, hunches and inclinations. In no way am I advising people to stay out of the market. Fact is, I’m not advising anything, one way or another.
What I am doing is supporting Matt Clark and the level-headed approach he’s using in a historically high market environment that is fraught with risk. I wouldn’t have the manager of our public money doing it any other way.
John Tsitrian is a businessman and writer from the Black Hills. He was a weekly columnist for the Rapid City Journal for 20 years. His articles and commentary have also appeared in The Los Angeles Times, The Denver Post and The Omaha World-Herald. Tsitrian served in the Marines for three years (1966-69), including a 13-month tour of duty as a radioman in Vietnam. Republish with permission.
Photo: a day of stock price changes, public domain, wikimedia commons
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