Monday, June 04, 2007

Harvard's Investment Advice

Dr. Mohamed A. El-Erian, President and CEO of Harvard Management Company, Deputy Treasurer of Harvard University, and member of the faculty of the Harvard Business School was interviewed by Fortune magazine and provides a 4 point strategy for investors:

1) Diversify and internationalize - growth rates are higher outside the US and commodity exposure provides diversification and a hedge against middle eastern "events."
2)Private equity's huge appetite for targets will propel large cap US stocks ahead of small caps.
3)Inflation protect your portfolio. US productivity gains and the impact of global labor outsourcing will diminish over time.
4) Be aware of the huge potential impacts of soverign wealth funds (SWF's). According to Morgan Stanleys estimates, the world’s SWFs could grow from US$2.5 trillion now to nearly US$12 trillion by 2015, and could exceed the total size of the world’s official reserves within five years, i.e., by end-2011.


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