Endowment Fund Performance Numbers Posted

Endowment Fund Performance Numbers Posted

endowment fund performance numbers posted

Endowment Fund Performance Numbers Posted

This past Friday I was catching up on some reading and research of industry periodicals that seem to pile up on my desk until I either read them – or discard them. A few interesting statistics caught my attention as I start to look to planning for 2017. Per Pensions and Investment Magazine – the largest educational institutional investors posted their annual portfolio returns for the year ending September 30th. The average returns posted was -1%. The best in bunch was Yale University which posted a positive return of 3.4%.

Endowment Fund Performance Numbers Posted

Since we are talking about institutional investors who oversee billions of dollars of endowments (Harvard is the largest at $34 billion) – one would think that these folks are the best and brightest in the country – if not the world. Negative 1% does not seem like it would take a lot of work to achieve.

In another article in Wealth Watch – they reported that the chances of earning an average of 5% on investment portfolios over the next 10 years is a whopping 0% – yes that’s not a typo. I am used to seeing probabilities of 5% or 94% – it’s rare to see a 0% probability. In the article they provided advice to those that have a ten year retirement plan window – save more to make up for the expected low returns.

For those readers that are clients or at least regular reviewers of my Monday Morning messages – it should be clear that my Safe Money Product message is not and never will be the answer to managing a portfolio. I profess that one should have a mix of investments from stock to bonds – to cash – to precious metals (if that’s your liking) – to real estate – etc. One could spend a lifetime arguing as to what allocation into these various holdings is optimal – in fact some in our society make a great living doing just that. I look at my products as compliments – not replacements – to one’s portfolio strategy.

What I feel is inarguable is that having a mix of alternative safe money products in a portfolio will lower the overall volatility (called beta) of one’s investment holdings. One of the reasons for this is by having consistent and known returns for some of one’s holdings – even if the returns are 5% – will even out the risk curve. Structured Settlements and Mortgage Notes can achieve these objectives fairly well.

I did some research of my own this past Sunday while waiting for the Eagles game to begin and although my research was basic and on a sheet of legal paper – I could calculate that over the last twelve months – ending September 30th – my clients have averaged about 5.75% on their Safe Money holdings. {I calculated this by taking the first 10 clients on the list who have Self-Directed IRAs with Provident Trust and compared their 9/30/15 balance vs. their 9/30/16 balance – I of course added back any withdrawals that were taken and subtracted out any additions that were added.}

As I continue to add different alternative safe money products to our offerings – my hope is to get those averages up a point or two without causing much more principal risk along the way. Stay tuned for more reports on how we plan to accomplish this objective.

For more information about Dan Reisinger or his firm please visit http://www.safeinvestingservices.com. You can read additional published articles and also learn more about the products and services that Dan utilizes for his clients. Dan has been in the financial business for nearly 3 decades. Dan resides in Landenberg, PA with his wife and four children.

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