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Can Simple Asset Allocation Strategies Outperform the Ivy League Endowments?
Douglas Roberts, Fall 2017, Volume 20, No.2
Free Download: The Journal of Wealth Management
During the last 30 years, the compound annual return of the endowments of the Ivy League and other comparable educational institutions have received worldwide attention for exceptional performance over an extended period of time. The transition from a pure asset allocation strategy in public markets to one with a large allocation to alternative assets is often cited as the primary reason for the superior investment performance.
An alternative explanation is that the superior performance is due to a riskier portfolio allocation through the use of alternative investments. This can take the form of a higher equity allocation, an equity allocation to riskier securities, or the increased use of portfolio leverage through these alternative investment vehicles. There have been studies to analyze if these alternative investments have added significant value to endowment performance which could not have been created with the addition of risk using these factors applied to a conventional public asset allocation.
We examine the investing success of the endowments of Ivy League universities and other comparable institutions and compare them to several simple asset allocation strategies in the public markets. We want to determine if these alternative investments offer additional value which could not be created through increasing the level of risk in these public portfolios, possibly through the use of leverage.
Source: Channel Capital Research Institute, LLC. Past performance is not an assurance of future results. The performance results shown herein are hypothetical and backtested and are not that of any fund or account managed by Channel Capital Research Institute, LLC. (Does not reflect performance information for any strategy available for investment).
Online
Doug Roberts is a regular Contributor to AOL's Money & Finance section.
He specializes in reporting on and interpreting Fed policy.
Click here to read his most recent column.
In The Media
Doug has become a familiar face on CNBC and the Fox Business Channel, and is called upon by the financial press for his insights on a regular basis.
Click Here for links to his video clips and articles.
Publishing
"Follow the Fed to Investment Success - The Effortless Strategy for Beating Wall Street" was published by John Wiley & Sons in April 2008.
Click Here to order.
Praise for Follow the Fed to Investment Success
"This is a great strategy for investors who actually have a job, a family, and interests - in other words, a life."
- Randall W. Forsyth
Editor
Barron's
"Facts are facts, numbers don't lie, and Doug's Follow the Fed® investment strategies make sense for the vast majority of people... It is easy, inexpensive and, over time, should make you a lot of money."
- Hilary Kramer
AOL Finance Editor
"If Douglas Roberts were to teach a course in money management for the average investor, his mantra would be 'Omit Market Noise.' ... Roberts has pared all the equity research and market predictions down to three simple words: Follow the Fed®."
- Nancy Opiela
CFA Institute Magazine
"Follow the Fed® is a great resource for anyone who wants to understand more about the world of investing. More importantly, it shows them how to make more money by spending far less time and money than they do today."
- Danon Robinson
Managing Member
Toro Trading LLC
"In Follow the Fed to Investment Success, Doug Roberts reduces the mind numbing financial world to a comprehensible, simple and enjoyable read. His easy to follow recommendations do not require the reader to have a Masters in Finance, nor the need to monitor the financial market for hours at a time."
Nick Brown
Managing Director
GFI Group Inc.
"While Doug has written this book for the novice investor, even the most experienced professional can learn from his life and investment lessons. Written in an easy to comprehend style, he mixes serious stories and advice with personal revelations and a bit of history that make this book a must read!"
Paul C. Guidone, CFA
Managing Partner & Chief Investment Officer
Linden Point Capital Management, LLC
"Doug Roberts is a superbly talented investment guru. His unique approach, proven to work in any market, allows investors to get back to their lives while beating most of the Wall Street experts. If you’re looking to read only one book on growing your personal wealth, look no further that Follow the Fed to Investment Success!"
David N. Feldman
Feldman, Weinstein & Smith LLP
"Doug Roberts has unlocked a wonderful, simple and deeply historical perspective on how to intelligently and successfully beat the market. His well tested Follow the Fed® model runs counter to the current ‘get rich quick’ investment culture, emphasizing wealth preservation and a long-term strategy."
Samuel E. Navarro
Managing Director
Cowen & Company
"Anyone who believes they’ll be able to rely exclusively on Social Security for their retirement better think again. Having been a witness to years of careless government spending, I encourage everyone to find another way to ensure that you’ll have the money you need to enjoy life. I have read Follow the Fed to Investment Success, and truly believe that this strategy has what it takes to achieve that goal."
Joe Kyrillos
New Jersey State Senator
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