Game it: Where can institutional investing go wrong or right?

The challenge of large-scale institutional investing is serious business.  A few critical choices can mean the difference between long-term satisfaction and frustration for whole organizations, individual employees and a long list of other stakeholders. For decision-makers, it can mean the difference between job satisfaction and job searching.

The game of Monopoly™ and the reality of institutional investing 

So why not make a game of it? At a very young age, many of us learned the difference between owning a hotel on Park Place compared to a small house on Marvin Gardens when playing Monopoly™. A simple board game taught us to save and invest with an eye toward outcomes. One marathon of the game taught us that a few key decisions could determine whether we would be collecting recurring rent from our siblings or draining our bank accounts just to pass Go and collect $200.

Common questions many institutional investors face 

In today’s complex world of investment decision-making, Russell Investments has offered up a digital board game of sorts. This interactive quiz is designed as a self-guided discovery process for institutional investors.  Any player – in this case, a plan sponsor, non-profit organization or any other institutional fiduciary – can follow a common path of decision-making in order to learn about the agonizing pivot points that often can affect outcomes. Herein lies a sleepless night for many:

  • Is my manager selection process adequate to handle recent turnover at Tiny Capital Small Cap Fund?
  • Is my pension plan funded sufficiently to prevent a drain on the corporate balance sheet?
  • Is our Investment Committee correct in wanting to hire an external CIO?
  • Is my DC plan structured so the firm's workers will default into appropriate investment choices?
  • Is our non-profit staff losing sight of our mission in order to manage quarterly investment updates?

The path of this interactive journey provides quiz takers with a novel tour through the world of fiduciary choice. But the end game is meant to help institutional investors discover the strengths and weaknesses that can be inherent in any such decision-making practices. How do our habits, preferences and inclinations factor into effective financial oversight?

Can understanding ourselves help institutions in investment planning? 

In our experience, investors make better decisions when they understand themselves as much as the issues they face. When we see that other organizations and other decision-makers are faced with similar challenges, we are more apt to work through the challenges in a constructive, productive way.

So take a spin, try your hand at making institutional investing decisions. None of us are guaranteed those penthouse accommodations in the hotel on Park Place, but we might learn a little something about our own investment decision-making.