September 23, 2009
I’ve read a number of articles lately about the sizable losses posted by the largest endowments in the country for the year ending June 30, 2009. Yale’s $23 billion fund was down 25%. Harvard lost 27%. Cornell, Penn, and Columbia also suffered. Duh! Of course these massive funds suffered losses – the financial world was upside down last year. But I’m disheartened by the headline attention to one year’s returns and not the market trouncing long term performance of these funds. For example, Harvard’s average annual return over the past 10 years is 8.9% compared to a 60/40 equity/bond portfolio of 1.4% over the same period. Yale earned a 12% return over the 10 year period ending June 30, 2009. Compare that to the negative – yes, negative – 0.31% return of the S&P 500 over the past 10 years through September 22, 2009 and I have only thing one thing to say: Focus, people. Focus on the big picture, long term performance and don’t get distracted by the attention grabbing headlines. There’s always more to the story than a headline conveys. Trust me, I know. I used to write eye-catching headlines for my Fool and Morningstar articles to capture attention.
