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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Well worth reading for individual investors, but the book has lamentable holes given Swensen’s expertise. I am more interested in the token economy than the “core asset classe Swensen argues that there are basically three sources of returns: As an unconventiona, in Chapter 4, Swensen argues that investment firms purposefully obscure the distinction between making the bonus a percent of profit versus a percent of the profit above market returns.

cavid This is a very dry, academically written book that requires some motivation to read. Was that swensenn to some inherent superior knowledge, or just random chance? By structuring their fees in unconventioonal of the former, the firm is effectively getting a free ride for market performance, something which they have no control over.

He seems to go overboard selling the idea that he mutual fund industry fails to serve the individual investor. Good info, but didn’t seem like anything new. Bonds, stocks, real estate?

Portfolio 3 is the Swensen portfolio from this article. Swensen recommends that investors should select not for profit mutual fund companies such as Vanguard or TIAA-CREF to minimize investment expenses and largely eliminate conflicts of interest.

A Fundamental Approach to Personal Investment.

Unconventional Success: A Fundamental Approach to Personal Investment by David F. Swensen

A contrarian investment alternative that promotes well-diversified, equity-oriented, “market-mimicking” portfolios that reward investors who exhibit the courage to stay the course. Backtesting provides some useful information, but its ability to predict the future performance is far from perfect.


Traditionally, the rule has been it takes at least 30 different stocks, diversified in various sectors of the economy, to reduce risk.

succfss This book has political implication. Want to Read Currently Reading Read. The book was written in David Swensen, Yale endowment swense advisor, popularized a diversified non-traditional portfolio which included private equity, hedge funds, real estate and alternate assets. Even the slightest decrease or delay in portfolio contributions, during the worst of the bear market would have caused that small advantage to disappear, and there is something to be said for sleeping at night.

Swenson himself has said that most endowments that attempt to follow his strategies are unlikely to find such success. Clear outline of the motivations for changing how you invest for your future!

Swensen doesn’t touch on these crucial questions. I definitely prefer “Lazy Person’s Guide to Investing” unconventoonal much of the same information presented in a much more accessible manner.

The book also explores the downside of active management and other aspects of finance, like ETFs. But I don’t think there’s anything at all wrong with the Swensen portfolio for individual investors as long unconnventional its implemented in a low cost way, and they stick to it.

This book is horrible.

From excessive management fees to the frequent “churning” of portfolios, the relentless pursuit of profits by mutual-fund management companies harms individual clients. We also compare the three KISS portfolios discussed in this series. I strongly feel the best thing about Seeking Alpha is the sharing of ideas. Refresh and try again. Written in plain English so that anyone who is interested in investing can understand what the author is saying.

Unconventional Success: A Fundamental Approach to Personal Investment

For instance, if you own your sucxess house, that could substitute for an investment in REITs. If a short-term investor buys long-term bonds, the fluctuations described at the beginning unconnventional the paragraph introduce risk when it comes time to sell them; conversely, a long-term investor buys short-term bonds, they must buy them many times over the course of the investment, which means they must buy repeatedly under variable terms that depend on the current interest rate.


This post will use an intermediate treasury fund as the vehicle for the bond allocation. Both the Sharpe Ration and the Sortino Ratio attempt to even the playing field by measuring the portfolios on a risk-adjusted basis. Board index All times are UTC. An eye opening book This book serves as an excellent tool to the world of investing in mutual funds. Similarly, if one anticipates inheriting a substantial sum in bonds, that should be considered as part of the asset mix of the portfolio.

The barbell approach over the time frame from was clearly a winning strategy. 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. Unconventional Success Hardcover I remain conflicted about the role that bonds should play in my own portfolio. Unconventional Success provides the guidance and financial know-how for improving the personal investor’s financial future.

The charts below click images to enlarge show portfolio allocations. As with the previous articles, this article is intended to start a conversation.