Point one: In some years (like 2022), cash is a good asset class.
Point two: Evaluating the merits of a portfolio with lots of asset classes and tilts to factors supported by literature (like value) or RAFI vis-a-vis market cap weights for free (or .03 bps, efc) could take years.
My university’s endowment has lots of private equity, private credit, farmland, private real estate, distressed EM debt, etc. A 3-fund portfolio has destroyed it over 1, 2, and 3 year periods with much less cost. But not remotely close over 15 or 25 years with much less volatility. Projections from recent experience are difficult.
Point two: Evaluating the merits of a portfolio with lots of asset classes and tilts to factors supported by literature (like value) or RAFI vis-a-vis market cap weights for free (or .03 bps, efc) could take years.
My university’s endowment has lots of private equity, private credit, farmland, private real estate, distressed EM debt, etc. A 3-fund portfolio has destroyed it over 1, 2, and 3 year periods with much less cost. But not remotely close over 15 or 25 years with much less volatility. Projections from recent experience are difficult.
Statistics: Posted by BF3000 — Fri Feb 07, 2025 9:04 pm
