How Harvard and Yale Beat the Market What Individual Investors Can Learn From the Investment Strategies of the Most Successful University Endowments

Praise for How Harvard and Yale Beat the Market

"How Harvard and Yale Beat the Market is a must-read for anyone managing his own or other people's money. It demystifies new investments such as hedge funds and principal-protected products. This engaging handbook belongs in every investor's library."

—Deborah Weir, Parker Global Strategies, author of Timing the Market: How to Profit in the Stock Market Using the Yield Curve, Technical Analysis, and Cultural Indicators

In today's volatile market, investors are looking for new ways to lower their risk profile. For author Matthew Tuttle, the best means of achieving this goal is to look towards large university endowments—which attempt to capture consistent returns while maintaining a low level of risk.

How Harvard and Yale Beat the Market explores the benefits of endowment investing and shows you how to structure your individual investment endeavors around an endowment-type portfolio. While the average investor doesn't have access to many of the money managers and vehicles that high-profile endowments use, you can still learn from the investment strategies outlined here and implement them in your own investment activities. Filled with timely tips and practical advice from an expert who designs portfolios based on endowment investment strategies, How Harvard and Yale Beat the Market will put you in a better position to achieve investment success.

Matthew Tuttle, CFP, is a partner in the Private Client Group, LLC, and the President of Tuttle Wealth Management, LLC (an investment management strategic alliance of the Private Client Group, LLC). He has been interviewed on CNBC and CNNfn, and is a frequent contributor to Forbes.com, the Wall Street Journal, SmartMoney, and Dow Jones Newswires.

Acknowledgments v

Introduction: Why You Should Invest Like an Endowment vii

Part I: Investment 101: An Introduction to the Endowment Philosophy of Investing

Chapter 1 The Current Environment and the Need for New Thinking 3

Chapter 2 Common Investment Mistakes 13

Chapter 3 Diversification: The Best Investment Strategy 25

Chapter 4 Skill-Based Money Managers versus Style Box-Based Money Managers 35

Chapter 5 Introduction to the Endowment Philosophy 53

Chapter 6 Why Large Endowments Outperform the Market and How You Can, Too! 63

Part II: Investment Vehicles

Chapter 7 Mutual Funds, Separately Managed Accounts, Exchange-Traded Funds, and Exchange-Traded Notes 79

Chapter 8 Structured Products 89

Chapter 9 Hedge Funds and Funds of Funds 97

Part III: Endowment Asset Classes and Investing Strategies

Chapter 10 Absolute Return 121

Chapter 11 Stocks 129

Chapter 12 Bonds 139

Chapter 13 Real Assets and Commodities 151

Chapter 14 Managed Futures 165

Chapter 15 Private Equity 177

Chapter 16 Managing Some of Your Money In-House 185

Chapter 17 Portable Alpha 197

Part IV: Designing Your Portfolio

Chapter 18 Suggested Allocations 211

Chapter 19 Choosing and Managing Money Managers 217

Chapter 20 Putting It All Together 227

Chapter 21 Putting It in Writing: The Investment Policy Statement 243

Final Thoughts 259

Appendix: Key Terms 261

About the Author 269

Index 271

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