Investment Planning

Investment Publications Highlights: April 2014

“The Arithmetic of ‘All-In’ Investment Expenses” John Bogle, Financial Analysts Journal vol 70, no. 1 (January/February 2014): 13-21. Jack Bogle, the founder of Vanguard, argues that commonly cited expense ratios understate the true, “all-in” cost of investing in actively managed equity mutual funds. He estimates the magnitude of the additional costs and concludes that a…

Investment Publications Highlights: February 2014

“What Happens in EM (Mostly) Stays in EM” Goldman Sachs, January 29, 2014 Problems common to multiple emerging markets have attracted increasing attention from investors, helping cause a global sell-off in January. While the domestic challenges for EM countries are likely to persist, argues Goldman Sachs’ economics research team, the risk that they will impact…

A Framework for Benchmarking Private Investments

Executive Summary Private investments often play an important role in an investor’s portfolio, yet the inconsistent methodologies typically used to evaluate private investment performance and public market performance result in a lack of understanding about true relative performance. The two most common measures of investment performance—time-weighted returns (TWRs) and money-weighted returns, typically an internal rate…

The Endowment Model 2.0: A Success Story That Endures

The endowment model of investing is far from broken. Early adopters of the model continue to push forward, reaping impressive gains along the way. In this paper we provide a practitioner’s perspective on the endowment model, the experience of some early adopters of the strategy, and the execution of the model in the current environment.

Concentrated Stock Portfolios

Executive Summary Many families have significant wealth tied up in the publicly traded shares of a single firm. Concentrated exposure to a single stock—often the family’s original source of wealth—represents a significant risk to the family’s wealth and its future spending and charitable-gifting power. Single stocks, on average, are about 68% more volatile than a…

Pension De-Risking in a Low-Rate Environment—A Better Solution

After assessing the current environment of extremely low interest rates and its implications for defined benefit plans, we articulate our view on how to develop a flexible de-risking framework that takes into account today’s low yields. We contrast this to the more formulaic and mechanical “glide path” concept advocated by many pension industry participants. Defined…