BOOK REPORT Pioneering Portfolio Management... by David Swensen
Pioneering Portfolio Management: A Fundamental Approach to Personal Investment by David F. Swensen
This book is easy for the “lay person” to understand but not written in simple prose. It is not an easy read or a “how to” book. Outlines the dos and don’ts of personal investment and most importantly, gives the reasons why he believes this with examples and references included.
He discusses his suggested portfolio and then elaborates on what makes up a “Core Asset”. US Treasuries are considered a core asset but both commercial and municipal bonds do not make the cut. His discussion of this is definitely interesting.
The second half of the book is devoted almost exclusively to the history and the evolution of the abuses of the mutual fund industry. Some would find this part of the book tedious and repetitive but I did not have a problem with it. It answered some questions for me. This is the best narrative of how mutual funds really make their money that I have read so far. There is also an excellent explanation of all of the standard and hidden fees. For example “…commissions may be paid for research services…may include computers and related hardware” really means kick backs for selling our mutual funds.
He plays no favors. Many times he promotes Vanguard because of their low fees and non-profit status. On the other hand he criticizes them for their reluctance when it comes to obtaining SAI (statement of additional information) reports.
All indexes are not created equal. The Russell indexes have much higher turnover.
His overview of ETF landscape was helpful to me.
The bottom line is that if there ever was an investment “expert”, Swensen qualifies with his lifetime of experience running money at Yale and TIAA CREF. Also, he is one of the few in the industry that doesn’t seem to be selling something. This is a useful book for those interested in managing their personal finances.
Domestic Equity 30%
Foreign Developed Market 15%
Emerging Market 5%
Real Estate 20%
US Treasury Bonds 15%
US Treasury Inflation Protected Securities 15%
Free to Canoe