PT  - JOURNAL ARTICLE
AU  - Laurence B. Siegel
TI  - REBUTTAL: The Market Portfolio Is Bigger Than You Think
AID  - 10.3905/joi.2021.1.187
DP  - 2021 Jul 07
TA  - The Journal of Investing
PG  - joi.2021.1.187
4099  - https://pm-research.com/content/early/2021/07/07/joi.2021.1.187.short
4100  - https://pm-research.com/content/early/2021/07/07/joi.2021.1.187.full
AB  - The true opportunity set and hypothetical benchmark for investors is, and always has been, the aggregate portfolio of every asset in the world. This portfolio is very diverse and complex. To control risk and make the investor’s job more manageable, most of these assets have been excluded from institutional portfolios, which have instead focused on public equities and bonds. The endowment model opens up the investment process to the true opportunity set and makes it possible to earn returns from sources that have traditionally been closed to both institutional and individual investors.TOPICS: Portfolio theory, portfolio construction, foundations & endowments, performance measurementKey Findings▪ The true world market wealth portfolio is much larger than the total capitalization of public stock and bond markets.▪ Active investors should consider the entire world market wealth portfolio, to the extent that it can be accessed, as their opportunity set.▪ Alternative investments are not new and have been used by endowments and other investors over a long period of historical time.