When it comes to asset allocation strategies, one size should not fit all.
David Salem says this approach applies to portfolio managers at any scale, whether it’s a university with a massive, multi-billion dollar endowment or a small family financial advisor next door.
“What Harvard has done is they’ve aggregated assets,” Salem explains in this clip from The Macro Show “They don’t need to do this. They could split it up into two to three risk pools.”
Salem adds: “If you were a Goldman Sachs or Merrill financial advisor, and one family said, ‘We’re 80% reliant on our portfolio to support our lifestyle’ and another family said, ‘We’re 20% reliant,’ and you gave them the same portfolio, at the very least it raises questions. At worst, it’s professionally negligent.”
Watch the full clip above.
