How Harvard and Yale Beat the Market: What Individual Investors Can Learn From the Investment Strategies of the Most Successful University Endowments
by: Matthew Tuttle
How Harvard and Yale Beat the Market: What Individual Investors Can Learn From the Investment Strategies of the Most Successful University Endowments
By Matthew Tuttle
Publisher: Wiley
Number Of Pages: 276
Publication Date: 2009-04-06
ISBN-10 / ASIN: 0470401761
ISBN-13 / EAN: 9780470401767
Product Description:
Praise for How Harvard and Yale Beat the Market
"How Harvard and Yale Beat the Market is a must-read for anyone managing his own or other people's money. It demystifies new investments such as hedge funds and principal-protected products. This engaging handbook belongs in every investor's library."
—Deborah Weir, Parker Global Strategies, author of Timing the Market: How to Profit in the Stock Market Using the Yield Curve, Technical Analysis, and Cultural Indicators
In today's volatile market, investors are looking for new ways to lower their risk profile. For author Matthew Tuttle, the best means of achieving this goal is to look towards large university endowments—which attempt to capture consistent returns while maintaining a low level of risk.
How Harvard and Yale Beat the Market explores the benefits of endowment investing and shows you how to structure your individual investment endeavors around an endowment-type portfolio. While the average investor doesn't have access to many of the money managers and vehicles that high-profile endowments use, you can still learn from the investment strategies outlined here and implement them in your own investment activities. Filled with timely tips and practical advice from an expert who designs portfolios based on endowment investment strategies, How Harvard and Yale Beat the Market will put you in a better position to achieve investment success.
Summary: On the potential benefits of an "absolute return" approach to investing
Rating: 5
As Matthew Tuttle makes crystal clear in the Introduction, this book "will not teach you how to find the next great stock. It will not tell you how to tell when you are in a bull or bear market. It will not predict that the Dow Jones Industrial Average is going to 50,000, nor will it predict that it is going down to 5,000. What it will do is teach you the strategies that large college endowments have used to beat the markets with less risk. You can choose to apply these strategies to your portfolio as a whole or as part of your portfolio, whatever makes the most sense to your situation...[it will] provide you with the tools you need to make sure your savings are there when you need it. This book will tell you why it is important for you to invest like the endowments do and how the current financial environment will actually enable you to make substantial profits."
Tuttle carefully organizes his material within four Parts. In Chapters 1-6, he explains the endowment philosophy of investing (he explains the need for "new thinking," reviews common investment mistakes, explains why diversification is the best strategy, identifies the differences between "skills-based money managers" and "style-box-based money managers, " introduces the endowment philosophy, and explains why endowments (as of when he wrote this book) outperform the market and how his reader also can. Then in Chapters 7-9, Tuttle examines various investment vehicles. The material in Part III (Chapters 10-117) covers endowment asset classes and investment strategies, and then in Chapters 18-21, her shares his thoughts about how each reader can design her or his investment portfolio (i.e. allocation options, selecting and managing a money manager, "Putting It All Together," and formulating an investment policy statement in writing). Tuttle does all he can to help his reader to understand the strategies that the investment community is (oh so slowly) using as it moves toward an "endowment, absolute return" approach to investing. As of when he wrote this book, Tuttle asserts that more and more mutual funds were being introduced "each day" that took this approach and hedge funds "are increasingly becoming a more important force in the marketplace." Therefore, with all of these new products, "structuring an endowment type of portfolio will only become easier."
As Tuttle would be the first to admit, there is no shortage of information available now; in fact, it has become much more difficult to absorb and digest investment information and the nature of relevant information can sometimes change quite rapidly as, for example, when a new presidential administration continues to introduce and pursue policies in response to major developments in the investment community, especially during the last 6-9 months. To suggest that there are now more and better choices does not, in my opinion, necessarily mean that evaluating them is easier. For many people who read this book, selecting and then collaborating with an appropriate money manager (the subject of Chapter 19) is not only desirable; it is imperative. It is also true that physical fitness and financial fitness share much in common. Both require specific objectives, formulation of a "regimen" for what Anders Ericsson has characterized as "absolute practice" (i.e. frequent, focused, rigorous, cohesive), and supervision by a knowledgeable and demanding mentor. Re this past point, Tuttle's advice in Chapter 19 is eminently sensible. He briefly discusses eight "steps" and guidelines on Pages 218-219. He also explains why, when selecting a money manager, to "look at the numbers in terms of correlation, modern portfolio statistics, and maximum drawdown. He skillfully uses seven "Tables" to illustrate key points. By the end of this chapter, Tuttle's reader should be able to make appropriate decisions about asset allocation and the selection of a money manager. Only then can the investment portfolio be integrated into her or his personal life.
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