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The Yale Endowment's Biggest ETF Investment And The Logic Behind It
I thought endowments generally invested conservatively?
Me too. I thought the old standard was a 60/40 allocation. 60% stocks. 40% bonds.
Now that has been replaced with a lot of alternative investments like private equity, hedge funds, merger arbitrage, etc, but still JohnChisum's point remains.
And the person in charge of the Yale endowment is David Swensen. He's a big believer in multiple asset classes that don't correlate well with each other.
FWIW, he wrote a book for the non-professional investor, and recommended the following asset allocation:
20% REIT 15% TIPS 15% US Treasury bonds 30% US stocks 20% foreign stocks (including a dedicated emerging markets allocation)
Lecture by David Swenson to Robert Shiller's Financial Markets class where Swenson explains why he feels the 60/40 model is broken for endowments and other portfolios with an unlimited time horizon.
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According to M*, SPY has a dividend yield of 1.83%
I thought the old standard was a 60/40 allocation.
60% stocks. 40% bonds.
Now that has been replaced with a lot of alternative investments like private equity, hedge funds, merger arbitrage, etc, but still JohnChisum's point remains.
And the person in charge of the Yale endowment is David Swensen. He's a big believer in multiple asset classes that don't correlate well with each other.
FWIW, he wrote a book for the non-professional investor, and recommended the following asset allocation:
20% REIT
15% TIPS
15% US Treasury bonds
30% US stocks
20% foreign stocks (including a dedicated emerging markets allocation)
all passively invested, meaning with index funds.