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Why You Should Invest Like Harvard

The top university endowments have been announcing their annual investment returns over the past week.

Harvard University announced its endowment rose 15.4% in the fiscal year ending June 30th. That return trailed Yale University’s 20.2% and Stanford University’s 17% for the same period.

These are solid returns. But each endowment trailed the S&P 500’s return of 24.6% over the same period by a substantial margin.

Once again, look for the “smartest guys in the room” to catch a lot of flack for being unable to match, let alone beat, a simple S&P 500 Index fund.

That said, it’s not like Harvard hasn’t been making money. In fact, the Harvard endowment generated an average of 11.4% over the past five years. Notwithstanding the challenges of the financial crisis, that’s not far off its long-term track record of 12.3%.

The real issue is that Harvard and its academic rivals have not only trailed the S&P 500 over the past five years, but also have even struggled to match a conventional 60/40 mix of U.S. stocks and bonds.

Read more about how you can follow Harvard’s investment strategy at Eagle Daily Investor.

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Why You Should Invest Like Harvard

the Harvard endowment generated an average of 11.4% over the past five years. Notwithstanding the challenges of the financial crisis, thatâ??s not far off its long-term track record of 12.3%.

The top university endowments have been announcing their annual investment returns over the past week.

Harvard University announced its endowment rose 15.4% in the fiscal year ending June 30th. That return trailed Yale Universityâ??s 20.2% and Stanford Universityâ??s 17% for the same period.

These are solid returns. But each endowment trailed the S&P 500â??s return of 24.6% over the same period by a substantial margin.

Once again, look for the â??smartest guys in the roomâ?ť to catch a lot of flack for being unable to match, let alone beat, a simple S&P 500 Index fund.

That said, itâ??s not like Harvard hasnâ??t been making money. In fact, the Harvard endowment generated an average of 11.4% over the past five years. Notwithstanding the challenges of the financial crisis, thatâ??s not far off its long-term track record of 12.3%.

The real issue is that Harvard and its academic rivals have not only trailed the S&P 500 over the past five years, but also have even struggled to match a conventional 60/40 mix of U.S. stocks and bonds.

Read more about how you can follow Harvard’s investment strategy at Eagle Daily Investor.

Written By

Nicolas A. Vardy is the London-based International Economics Correspondent for Human Events.

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