How Economists Allocate Their Assets

Economists aren’t known for their alacrity in the investment world of stock, bonds, and mutual funds. However, as this article illustrates, they aren’t too shabby at picking not only the right investments but the right allocation, too.

The American Economic Association had a gain of over 10 percent with their allocation versus the S&P 500 of just a little over 5 percent in 2007. Here’s how the economists allocated their investment funds:

Before April 2007 After April 2007
Total bond-market index fund 20% 0%
Long-term investment-grade bond fund 10% 15%
High-yield corporate-bond fund 5% 0%
S&P 500 index fund 45% 45%
Mid-cap index fund 5% 5%
Small-cap index fund 5% 5%
European stock fund 5% 0%
Pacific stock fund 5% 0%
International equities ex-U.S. fund 0% 25%
Emerging markets equity fund 0% 5%

Note the 25 percent increase in International equities.

When Economists Play the Market –


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