4 ms·

Harvard's average real annual return is 10.2% (Piketty's book "Capital" p569) You need a team of very talented investors to get these types of returns y/y

• savanaly 8y ago
  Isn't that almost exactly what, say, the s&p 500 returns? [0] And you don't need a team of anyone to buy and hold that. [0] https://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp https://www.investopedia.com/ask/answers/042415/what-average...
  • petermcneeley 8y ago
    "Adjusted for inflation, the historical average annual return is only around 7%. " from your link.
  • dimva 8y ago
    There's a 10% nominal return, but a 7% real return. Harvard beats this by 3% annually, which is huge!
  • scrumbledober 8y ago
    the real test is how well Harvard's fund does in year where the s&p 500 is doing poorly.
    • longerthoughts 8y ago
      No, the real test is sustained performance over time in the form of an average. If the S&P 500 falls 10% in a given year, I can hold 100% cash, light 5% of it on fire, and outperform the S&P 500 - that doesn't make it a sound long term strategy.
      • incognition 8y ago
        Are we also omitting the fact that it's a nonprofit and therefore has grossly better tax treatment?
        • wheelerwj 8y ago
          thats not how taxes work... I am not a lawyer/cpa but if I understand correctly, any investment income harvard receives would be taxed at the normal rate for that type of activity.
• ThirdFoundation 8y ago
  While that's true, they still lag what I think is their benchmark, other top tier schools: https://www.bloomberg.com/news/articles/2018-06-26/harvard-billionaires-bail-out-alma-mater-from-poor-fund-returns https://www.bloomberg.com/news/articles/2018-06-26/harvard-b...
• incognition 8y ago
  It's all based off of the Yale system. Basically longer term outlook allows use of decoupled asset classes such as timber and commodities