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Investment Strategy

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Submitted By oledogg
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Running Head: INVESTMENT STRATEGY

TUI UNIVERSITY
Ford Foundation Investment Strategy
James J. Chapa
FIN 504
Module 1 Case Assignment
Dr. Geoffrey Clarkson
January 24, 2009

The Ford Foundation’s investment policies are a critical component of continued organizational success. To support its wide range of programs, the Foundation relies on a solid financial foundation and reliable sources of income. Quality investments provide part of this critical revenue stream. Setting a solid investment strategy requires an understanding of investment fundamentals, coupled with the investment goals of the Foundation. Analysis of these concepts shows why the optimal investment strategy for the Ford Foundation differs from that of other organizations or even individual investors, as the unique goals of foundations require particular investment philosophies. The Foundation faces financial decisions concerning not only how to use money today, but how to manage money and assets saved for later use. The methods used to save or invest this capital have a dramatic effect on the Foundation’s ability to achieve its mission in the future. Inflation constantly threatens to erode the future purchasing power of today’s savings. All investors must find ways to “put their savings to work,” seeking rates of return that compensate or overcome the effects of inflation and ensure adequate funds exist to meet future needs. First, investors must determine their goals. The wide variety of investment options available in today’s global marketplace offer varying levels of risk and return. Investors must approach these choices armed with a clear understanding of what they hope to accomplish, and the tradeoffs they will accept to achieve their goals. In general, the predominant tradeoff decision concerns risk and return. Investments that offer higher…...

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