David F. Swensen manages investments for the $22.5 billion endowment at Yale.
Picture by Alan S. Orling for The New York Times
I have mentioned David F. Swensen in my blog before. He is one of these interesting personalities, along with Warren Buffett who have an uncanny knack of allocating capital with optimal returns over time. Wonderful if you could persude these guys to look after your money! However more likely instead as an investor you will end up with one of the thousands of asset managers attempting to emulate Swenson’s success. Yet many investors think they have found the next Buffett or Swensen or at least thats what the investment managers tell them!
What is interesting is what Buffet and Swensen say about Joe Average investor...by the way that's you if you are reading this...and you are not alone as there are another 99% or so of you all in the same boat...which means you need a methodology when investing your capital.
What does Swenson say? What methodology can you learn from him? In an article in The New York Times on February 17, 2008 entitled
“Keep It Simple, Says Yale’s Top Investor” By GERALDINE FABRIKANT….“What should an individual investor do? Don’t try anything fancy. Stick to a simple diversified portfolio, keep your costs down and rebalance periodically to keep your asset allocations in line with your long-term goals.
For most people, he recommends a very basic approach: use index funds, exchange-traded funds and other low-cost instruments, and stick to your long-term asset allocation — even when the markets are in tumult.”Our point is that we believe exactly what Swenson has said. It is our view such a philosophy and methodology is the route to a successful investment experience over time.
Categories: Asset Class Management, Philosophy
posted by Murray Round Wealth Management @ 16:39,
Much of our investment philosophy is based on empirical research. We have detailed below a number of academic and industry articles. Some are highly technical while many are easier to read.
Financial TheoryPortfolio Selection by Harry
MarkowitzCharacteristics, Covariances, and Average Returns: 1929-1997 by Davis,
Fama and French
The Cross-Section of Expected Stock Returns by
Fama and French
The Costs and Benefits of Waiting to Invest by The
Schwab Centre for Investment
Asset AllocationDeterminants of Portfolio Performance by
Brinson,
Beebower and Hood
The True Impact of Asset Allocation on Returns by Roger G.
IbbotsonInvestment Policy Explains All by
Surz, Stevens, and
WimerMarket EfficiencyThe Parable of the Money Managers by William F. Sharpe
The Arithmetic of Active Management by William F. Sharpe
Stock Market Forecasting by Alfred
CowlesRandom Walks in Stock Market Prices by Eugene F.
FamaThe Loser's Game by Charles D. Ellis
Asset Management: Active versus Passive Management by Rex A.
SinquefieldMutual Fund Performance and Manager Style by James L. Davis
Market Efficiency, Long-Term Returns, and Behavioural Finance by Eugene F.
FamaOnline Investors:Do the Slow Die First? by Brad M. Barber
International InvestingWhere are the Gains from International Diversification? by Rex A.
SinquefieldPerformance of UK equity unit trusts by Garrett
Quigley and Rex
SinquefieldCategories: Articles, Asset Class Management, Research
posted by Murray Round Wealth Management @ 15:36,
This is a long video, yet it does have nuggets of gold for investors. Warren Buffett has built a reputation as an investor or as he puts it a specialist who allocates capital. If you have time, listen to it…there are some interesting points which can help an investor's understanding.
