Want better returns? Cut back on shares, bonds
The success of university endowments and the Future Fund demonstrates the advantage of making long-term bets.
Harvard, Yale, Princeton and Stanford are almost as famous for their wealth as they are for the education they provide. Harvard’s endowment fund is $US50 billion ($76 billion), while Yale, Stanford and Princeton all have more than $US35 billion.
These endowments are also renowned as successful investors. Yale’s fund has returned, on average, 10 per cent over the past 23 years, comfortably beating the 6 per cent on a 60:40 portfolio of US equities and bonds.
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