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A Hard Landing for University Endowments

http://www.nytimes.com/2012/10/13/business/colleges-and-univ...

College and university endowment returns for the most recent fiscal year, which ended June 30, are starting to roll in. And in many cases, they warrant a grade of "C" at best, and in some cases, an "F." Harvard reported a 0.05% loss and a drop in its endowment of over $1 billion in the same period, even as a simple S&P 500 index fund gained 5.5%.

Even more startling, data compiled by the National Association of College and University Business Officers for the 2011 fiscal year show that large, medium and small endowments all underperformed a simple mix of 60% stocks and 40% bonds over one-, three- and five–year periods. The 91% of endowments with less than $1 billion in assets underperformed in every time period since records have been maintained. Given the weak results being reported this year, that underperformance is likely to be even more pronounced when the fiscal year 2012 results are included.
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There's only one thing to do -- hire more diversity administrators.

--fleg
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Many of them have real estate holdings that likely didn't do too well.


Don't knock diversification. Yep, the stock market is on a roll due to Uncle Ben printing money like there is no tomorrow, but there is.

Sooner or later, the stock market will crash back to earth......

You don't want to be all in stocks....or maybe even 60% if your other half is bonds......they too will get creamed when interest rates rise.


remember, in the long run, it's not the fast runner that wins the prize year after year.

t.
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