David Swensen, investment manager of the Yale University Endowment Fund, has addressed how investors should set up and manage their. David Swensen’s portfolio (from Unconventional Success). DavidSwensen. “ Individual investors should take control of their financial destinies. Bogleheads – How many folks have read the book Unconventional Success? If you did, what are your thoughts? Is the book still relevant since it.

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He also carefully spells out how a bond investor’s risk corresponds to their time horizon.

Realizing an average annual return of Didn’t even know the blog existed. In the accumulation phase, market downturns, especially early on, can work to an investor’s advantage allowing them to buy low. Written in plain English so that anyone who is interested in investing can understand what the author is saying. By structuring their fees in terms of the former, the firm is effectively getting a free ride for market performance, something which they have no control over.

David Swensen’s portfolio (from Unconventional Success)

The return series begins inwhen Vanguard initiated an inflation protected securities fund. Instead, Swensen takes a more academic approach. I skipped large portions of the book as I realized that I want to look at different markets as Swensen.

Dec 14, Sean rated it really liked it. I am an individual investor who studies investing and shares my thoughts. I am more interested in the token economy than the unclnventional asset classe Swensen argues that there are syccess three sources of returns: One final bone to pick with Swensen’s strategy is the long term impact of asset class balancing.

Not sure if everything in this portfolio is “needed” but then who knows what is needed until the time that it is.


Swensen is also scathing in his discussion of asset-backed securities, of which the most common are mortgage-backed securities. This is primarily a good reminder that one cannot blindly trust that one is being sold what one is promised this is worrisome for the lazy investor who will follow Swensen’s advice to use passively managed funds; care must be still be taken.

He clearly and in detail states what is wrong with it. He suggests that schemes like privatizing social security would be a windfall for the mutual fund industry and would not serve the individual investor.

A surprisingly qualitative introduction to diversification in an investment portfolio as well as a structured assessment of pros and cons of various investment products. I remember crying in my root beer over the New Year’s weekend.

Swensen is the chief investment officer of Yale University and the bestselling author of Pioneering Portfolio Management. More books from this author: The past performance of Ferri’s and Swensen’s portfolios are very similar. Swensen is well aware of the factors. Chapter 5 has a scathing analysis of the advertising and misinformation surrounding a Charles Schwab account there are other case analyses; I like this one because it specifically addresses what diversification should look like. Unconventional Success provides the guidance and financial know-how for improving the personal investor’s financial future.

Aug 02, Nicholas rated it it was amazing.

The worldwide long term rate of return is about 0. Jun 26, Song rated it it was ok. Comments to this article are contained in the post: There are a few items of reasoning that did not seem to make sense.

Market situations now and in the future will never exactly match what has occurred in the past. I mostly wanted to post because there were a few snarky posts and I think he is one of the good guys in the business. For me, or someone like me, the Swensen portfolio may provide a good starting point.


The book was written in The tables below give annual returns, compound returns, and standard deviations for the Swensen portfolios, using returns for Vanguard investor share fund selections. Interesting thoughts on alignment of interests of market participants. Treasury bonds and TIPS.

Book Review: Unconventional Success by David Swensen

It’s not enough to beat swenzen, but rather one must beat market by a wide enough margin to overcome the additional costs of active management. Taylor has always written about the many benefits of the Three Fund Portfolio. Swensen says the most frequent form of market timing occurs in the form of investors failing to rebalance, which results in overweighting recent strong performers and underweighting recent weak performers.

It’s not a total waste to read the book though because the author really had the insights about asset management and fund investment pitfalls to avoid.

Because asset classes tend to revert to the mean, it is best to have a systematic rebalancing plan in place to avoid this indirect form of market timing. He invested in some set of Alts that worked out, I suspect others invested in a different set of Alts, and you never hear about them. I recommend the individual investor read the first half of the book, glean some asset allocation advice from a superior endowment manager, and leave the second-half for the birds.

Goodreads helps you keep track of books you want to read. Both the Sharpe Ration and the Sortino Ratio attempt to even the playing field by measuring the portfolios on a risk-adjusted basis.