Everyone would have to agree that Harvard University is one of the best in the U.S.. Of course, many will argue the point. We must to agree that some of the brightest attend and graduate from Harvard. Again, there are exceptions.
As an investor if someone from Harvard gave you a recommendation. You would gladly accept it and invest your money. Right?
Well you might want to reconsider this strategy. The Harvard Endowment fund released their performance results for 2017. They came in at a “disappointing” 8.1%. Disappointing because the S&P 500 reported a total return over double this amount for 2017.
When you read the explanations, you might become confused. Or as I said HUH???
Those that remember the EF Hutton commercial ‘when EF Hutton talks people listen’. Well when Harvard talks people listen. However, the results will often be disappointing.
In fact, the Harvard alumni have asked the Endowment fund changed to using index funds.
Now I will not recommend everyone put 100% of their investment money in the S&P 500. There is a need to consider risk when developing a portfolio. The S&P 500 on its own can be quite volatile.
However when investors
- Own equities with high quality short-term fixed income
- Globally diversify
- Rebalance
Over the long term they will realize the great returns the equity markets have to offer.
Stop trying to find the holy grail of investing. Unless that means working with an investor coach/fiduciary adviser to develop the right portfolio for you.
Your coach will help you build the right portfolio and keep you disciplined to your strategy.
