Comments on: David Swensen’s Updated Model Asset Allocation

By: Maury

Maury — Tue, 24 Jan 2012 21:16:35 +0000

Leaving off Corporate Bonds has nothing to do with trying to time the market and everything to do with the fact it is an asset class stacked against investors. It tries to be safe and provide better returns, but those can be achieved by investing 50% in government bonds and 50% in equities getting you best of breed for safety and better returns. Corporate bonds by their nature don’t have their incentives aligned with investors.

By: Betterment.com Review: Investing Made Simple, But Is It Worth The Cost? » My Money Blog

Fri, 14 Oct 2011 01:39:53 +0000

[...] see a 50% split between TIP and some nominal Treasuries bonds like IEF or SHY. (As recommended by David Swensen.) More diversification, same high credit [...]

By: MrsCasanova

MrsCasanova — Thu, 03 Dec 2009 15:31:27 +0000

I agree with matt about the interpretation of the economic condition. How long do you think it will be until the economy starts to recover?

By: Matt

Matt — Thu, 03 Dec 2009 01:39:28 +0000

You could interpret economic condition to mean that the relative global market weight of REITs has dropped since 2005, and Emerging Markets has grown. This allocation reflects that.

I always thought not rounding to the nearest 5% was silly anyway.

By: Chuck

Chuck — Wed, 02 Dec 2009 14:31:18 +0000

It’s ironic that developers of “lazy” portfolios make changes in light of recent events. It seems the lure of performance chasing is just too powerful, even for those that know better. A cap-weighted portfolio would adjust itself to these changing events, without needing anyone in the driver’s seat.

Vanguard has something called the Vanguard Total World Stock Index Fund (VTWSX). It invests in the almost 3000 largest companies of the entire world (weighted by market capitalization), so your entire stock allocation could be that one fund.

Swenson’s bond allocation is good, but restricting it to just government bonds implies something about the rest of the bond market. 50% total bond market index, and 50% would be more diversified, and have a better expected return (yes, with slightly more risk, but if your stock allocation is 15% REIT and 10% emerging markets, you are no stranger to risk).