Unconventional Success
by David F. Swensen
Yale's endowment chief tells individuals not to copy Yale: the mutual-fund industry's conflicts of interest, why most active funds fail investors, and a simple six-asset-class portfolio of low-cost index funds. It is a fierce critique and a clear prescription from someone who had every reason to defend the industry.
Read it if…
you want an insider's case against actively managed funds and a model portfolio.
Skip it if…
you want endowment-style investing; he says you cannot.
Three things you will actually use
- The fund industry's incentives oppose yours.
- Diversify across asset classes, not just stocks.
- Low cost, rebalanced, held.
Do this first
Compare your fund expense ratios to the index alternatives and calculate the thirty-year cost.
Our verdict
Fierce critique, clear prescription.
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