How Does Your Investment Portfolio Compare to the Yale Endowment’s?

Graph from CarlsonTwo of the most important aspects of a good investment philosophy can be summed up by the following questions. 1) Is this strategy likely to work? 2) Will I be able to stick with this strategy for long periods of time throughout the inevitable ups and down of the stock market? At Beacon, we have a thoughtful, well-defined investment philosophy that we think answers both of the above questions in the affirmative.

  1. We believe the process is likely to work because it is built on a large and growing body of evidence, and because we focus heavily on controlling the things that we can control (like investment costs, taxes and market underperformance).
  2. We also believe that we and our clients will be able to stick with our process over long periods of time, because we work hard to ensure that our clients take no more risk than is necessary to accomplish their long term goals.

Of course there will be times when our philosophy is less en vogue. Unfortunately, there is no perfect investment philosophy that will come out on top of every market situation. To borrow from the world of sports, Lebron James is the best basketball player in the world, but sometimes he has off nights.

That being said, because sticking with your investment plan is critical, it’s important to remind yourself that over time it really does work.  Like a sports fan, celebrating victories is one way in which we can increase the probability that we will be able to persevere during the less exciting times that are sure to come.

Toward that end, we wanted to direct your attention to one of our favorite thinkers on the topic of investment management, Ben Carlson. He published a piece comparing the investment approach we use and the more complicated strategies employed by some of the largest endowments in the country. 

As always, if you ever have any questions about your investment strategy—and more importantly, how that strategy serves the objective of helping you accumulate wealth for specific purposes—please let us know. We’d love to hear from you.

Jared Korver
[email protected]

A product of small-town North Carolina (Carthage, to be exact), I’m proudly married to my best friend and co-adventurer, Amy. Together, we have two sons–Miles and Charlie–and could more or less start a library from our home. I love being outside, can’t read enough, am in the habit of writing haikus, and find food and coffee to be among life’s greatest treasures.