- He explains why the mutual fund industry is generally not a great place to invest, because of the many costs involved: trading costs, management costs, and tax costs.
- He implies that diversification away from common stocks might be a good thing. Many advisors suggest a 60-70% allocation to stocks, but Swensen gives a "sample" allocation as having around 50% stocks, broken into 30% US, 15% developed foreign markets, and 5% emerging foreign markets.
- He states that diversification towards real estate (REITs) and bonds is a good thing. His sample allocation has 20% in real state, 15% in Treasuries, and 15% in TIPS.
- He states that municipal bonds and corporate bonds are not useful assets for diversification.
One of the best books I've read about individual investment strategies recently is David Swensen's Unconventional Success: A Fundamental Approach to Personal Investment. Swensen runs Yale's money, and he has an outstanding performance record. There are several points of interest: