Agree.Coato wrote: ↑Tue Oct 30, 2018 7:42 pm(I have read every Swensen thread on Bogleheads and every single time his thinking on the Yale Endowment and Unconventional Success seem to get combined.)
I read the book and really liked it. Swensen is a clear thinker and explained himself well. The purpose seems to be to protect in all environments.
TIPS for sudden inflation
Real Estate for long term inflation
Stocks for the good times, weighted to Large Cap for mild deflation
Intermediate Treasuries for severe deflationary times.
I think the weights of 15% direct deflation protection, 15% direct inflation protection with light hedges through quality/size and size of equity allocation work pretty well with the framework laid out in Dr. Bernstein's "Deep Risk".
It looks like it is more on the side of the investing universe of the Permanent Portfolio or Dalio All Weather (All Seasons?) rather than the Bernstein "No Brainer" / Buffet 90-10 / T.L. Three-fund / Larry Portfolio / RobertT factor 75-25 / Merriman and TrevH portfolios. It seems like if you fundamentally believe in a certain type of diversification, you talk about the first three (PP vs Swensen), and if you think that equity and bonds are enough to diversify (due to factors, or intl. or whatever) you can debate the second group against each other (Three Fund vs. No Brainer). Talking about the Swensen portfolio vs. the Three Fund makes no sense--the ideas that will attract you to one will nullify the other.
I really like the idea of this portfolio in its simplest form:
50% or 55% Vanguard Total World (55% for me)
20% or 15% TIAA Real Estate or Vanguard REIT (15% for me)
15% Int. Treasuries
This is close enough while cutting the equity portion to 1 fund from 2 or 3. It does move US/Int. from the 60/40 or 55/45 proposed by Swensen, but I doubt that that is a big enough deal to add in TSM/DM/EM and deal with it.
Not sure if everything in this portfolio is "needed" but then who knows what is needed until the time that it is.
I mostly wanted to post because there were a few snarky posts and I think he is one of the good guys in the business. People should be able to question the moving parts of his allocation, but questioning his motives etc. seems wrong.
Caveat: I don't do this portfolio, I do the Bernstein "No Brainer", but he and Bernstein are the writers whose prose I enjoy reading the most, so I have read the book a few times (esp. the section on bonds).
For my risk portfolio I am targeting:
Total world stock index 50%
Tiaa real estate 10%
Other alts 5%