I just read an interesting article
http://www.insidehighered.com/news/2010/05/21/endowments
The part I found most interesting was the table showing losses. It might be comforting to know that Harvard, with a team of experts, still lost a lot during the recession.
There's an application to personal finance here as well. These endowments got away from what their central mission was. They have a fiduciary responsibility to protect the endowments from wild swings in value. They are supposed to, in a prudent way, invest the assets for steady and sustainable growth. Maintaining your investing strategy is difficult because a series of small changes can leave you very exposed, like Harvard and UVA.
ReplyDeleteThanks for the article!