Thursday, July 29, 2010
Don't be afraid of "fair value"
The answer is quite simple: none!
Fair value is a general approach to pricing to ensure that the price represents the best price that one would expect to use to value an asset. GIPS provide a hierarchy to help firms navigate through the process to get this best price. And the very first level is market pricing! So, if you rely on market prices today and are able to get prices for all of your investments, nothing more needs to be done!