How has the current improvement in the stock market over the first two quarters of the 2009/10 fiscal year changed Vassar’s financial situation?
The preliminary return on the College’s endowment was 14.5% for the first six months of the fiscal year (July 1 to December 31, 2009). The average return for the three-year period ending on Dec. 31, 2009 is 1.1%; for the five-year period ending on Dec. 31, 2009 the average is 6.4%; and for the ten-year period ending on Dec. 31, 2009 it is 5.1%. Since the endowment lost roughly 24% of its value in 2008/09 (18% from investment losses and 6% for budgeted support of operations), the investment return earned in this fiscal year is applied to a much lower base. Thus it would take a much greater percentage return to restore the endowment to its starting value on June 30, 2008. To illustrate this point, let us assume that the endowment was worth $100 on June 30, 2008, and then assume a loss of 24% in its value, reducing it to $76. We would need a 32% return on the $76 to bring the value back up to $100, assuming no additional endowment spending. Substituting actual values, we started the 2008/
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