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Harvard and Yale Endowments

Harvard University sits atop the academic world with a staggering $25.9 billion endowment fund, nearly twice the size of the next biggest endowment at Yale University. This war chest has accumulated over the years on the basis of donations and the stellar returns recorded by…

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Evidence of the benefits of diversification

Modern portfolio theory. Lets look at the risk and return figures for 3 asset allocations since 1972. 1. 100% S&P 500 2. 60% S&P500 & 40% 10 Year US Govt Bonds 3. 20% S&P500, 20% Foreign Stocks (MSCI EAFE), 20% 10-Yr US Govt Bonds, 20%…

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Risk Parity

Let’s take a look at a way to practically implement risk-parity in a portfolio. A traditional 60/40 mix of stocks and bonds can be leveraged one of three ways. First, through a traditional margin account with the investor being charged the broker call rate +…

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Intro Reading

Three white papers by Bridgewater and PanAgora to introduce the blog and the topics of post modern portfolio theory and risk-parity… "Engineering Targeted Returns and Risks" – Bwater "The Biggest Mistake In Investing" – Bwater "Risk Parity Portfolios" – PanAgora

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