![]() Swensen shares more investing advice in his book Unconventional Success. But if you want to follow his advice, he shares some basic tips below. Swensen warns there's no "one-size-fits-all" approach to investing. So he wrote a book, Unconventional Success, with advice for the average investor. ![]() He argues that, by owning not only stocks and bonds but also holdings in real estate, timber, oil and gas, and other investments, you can get strong returns with less overall risk.Ī few years ago, he decided he wanted to spread his message to more people. Swensen teaches a course at Yale in which he airs his unorthodox view of the basics of a well-diversified portfolio. So there must be something in the genes." My father was a university professor, my grandfather was a university professor. "And I've always loved educational institutions. "I had a great time on Wall Street, but it didn't satisfy my soul," he says. He spent five years on Wall Street and then, 21 years ago, agreed to return to lead Yale's investment office. That sounds impressive until you realize that, with his track record, if Swensen started his own hedge fund, he could earn $50 million to $100 million a year.īut Swensen would rather work for Yale, where he earned a Ph.D. He could easily pass for a friendly high-school math teacher or a town pastor. Swensen, 52, is an unassuming, affable Midwesterner. Swensen says he could use automated software to help him balance the numbers each day, but that would take all the fun out of it. The monitors show the value of Yale's investments by category. He also has a nice computer with two flat-panel monitors on his desk, which sits in the middle of the small trading floor where he and his team of 20 analysts work. "And then I talk to one of my colleagues, who executes the trade. "I have a calculator," Swensen says with a chuckle. So how does Swensen keep track of it all? Any tiny market movement changes the balance of the whole thing. He has built a portfolio with stakes in venture capital funds, real-estate partnerships, emerging market stocks and scores of small, specialized investment outfits. And recently, Swensen has become passionate about trying to teach individual investors how best to save for retirement.įor a long time, universities invested in a plain-vanilla mix of stocks and bonds. Not at Harvard, Princeton, Stanford, or any foundation or pension fund Swensen consistently beats them all. He's made an average 16 percent annual return over 21 years - better than any portfolio manager at any other university. The man behind that investment success is David Swensen, one of the most gifted investors in the world. Yale University recently announced a 23 percent return on its investments, swelling its endowment to a whopping $18 billion. Scroll down for more investing tips from Swensen. They pay interest every six months and the principal when the security matures. Treasury Inflation-Protection Securities, or TIPS (15 percent): These are special types of Treasury notes that offer protection from inflation, as measured by the Consumer Price Index. The income is only taxed at the federal level. Notes and bonds pay interest semi-annually. government debt securities that mature in more than one year. Treasury Notes and Bonds (15 percent): These are fixed-interest U.S. Real Estate Investment Trusts (20 percent): Refers to stocks of companies that invest directly in real estate through ownership of property.Foreign Developed Equity (15 percent): Refers to stocks listed on major foreign markets in developed countries, such as the United Kingdom, Germany, France and Japan.Emerging Market Equity (5 percent): Refers to stocks from emerging markets around the world, such as Brazil, Russia, India and China.Domestic Equity (30 percent): Refers to stocks in U.S.-based companies listed on U.S.
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