The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets

by Mebane T. Faber; Eric W. Richardson

• ISBN13: 9780470442814
• ISBN10: 0470442816
• Format: eBook
• Copyright: 2009-04-01
• Publisher: Wiley

Summary

A do-it-yourself guide to investing like the renowned Harvard and Yale endowments.The Ivy Portfolio shows step-by-step how to track and mimic the investment strategies of the highly successful Harvard and Yale endowments. Using the endowment Policy Portfolios as a guide, the authors illustrate how an investor can develop a strategic asset allocation using an ETF-based investment approach.The Ivy Portfolio also reveals a novel method for investors to reduce their risk through a tactical asset allocation strategy to protect them from bear markets. The book will also showcase a method to follow the smart money and piggyback the top hedge funds and their stock-picking abilities. With readable, straightforward advice, The Ivy Portfolio will show investors exactly how this can be accomplished-and allow them to achieve an unparalleled level of investment success in the process.With all of the uncertainty in the markets today, The Ivy Portfolio helps the reader answer the most often asked question in investing today - "What do I do"?Mebane T. Faber, CAIA, CMT (El Segundo, CA), researches and manages a number of quantitative strategies at Cambria Investment Management, including equity and global tactical asset allocation portfolios.Eric W. Richardson, JD (El Segundo, CA), is the founder and President of Cambria Capital, LLC, a FINRA member investment banking and securities brokerage firm.

Table of Contents

Foreword

Preface

Acknowledgments

Constructing Your Ivy Portfolio

The Super Endowments

Endowments are Different

Size Mattersà

àand So Does Performance

Active Management Over Passive

Summary

The Yale Endowment

History of the Endowment

David Swensen's Ascent

Of Alphas and Betas

Outlining the Yale Process

Domestic Equity

Foreign Equity

Fixed-Income

Alternatives

Summary

The Harvard Endowment

History of the Endowment

The Owner's Mentality

Harvard's Swensen

More Money, More Problems

How Harvard Does It

Summary

Building Your Own Ivy League Portfolio

Do As I Do - Shadowing the Super Endowments

Risk-Adjusted Returns

àDo As I Say

Inflation is the Enemy

Creating an All-Weather Policy Portfolio through Indexing

Implementing Your Portfolio

Rebalancing Your Portfolio

Summary

Alternatives

Private Equity

What Is Private Equity?

Historical Returns and Benchmarking

How to Invest in Publically Listed Private Equity

Summary

Hedge Funds

A Brief Introduction to Hedge Funds

Fund of Funds

Options to Invest in Hedge Funds

Individual Hedge Funds

Fund of Funds

Practical Considerations

Summary

Active Management

Winning by Not Losing

Losing Hurts

The Quantitative System

Out of Sample Testing and Systematic Tactical Asset Allocation

Extensions

A Rotation System

Practical Considerations and Taxes

Discipline

Blood in the Streets (Pop out?)

The Systems vs. the Endowments

Why it Works

Summary

Following the Smart Money

Introduction to the 13F

Combining the Top Fund Managers to Create Your Own Fund of Funds

Summary

Develop an Action Plan

Implementing Your Ivy Portfolio

Portfolios Mentioned in The Ivy Portfolio

A Brief Review of Momentum and Trendfollowing

Additional Charts

Recommended Reading

Bibliography

About the Authors

Index

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