Myron Scholes on the real promise of the total portfolio approach

The real promise of the total portfolio approach is not simply greater flexibility in choosing investments, but the ability to dynamically manage risk as market conditions change.

Nobel Prize-winning economist Myron Scholes, the Frank E. Buck Professor of Finance, Emeritus, at Stanford Graduate School of Business, argued that institutional investors focus too heavily on selectivity and average returns, when managing downside risk can be critical to improving compound returns over time.

“Every period matters. There’s no long run. The long run is made of a sequence of short runs,” Scholes said, arguing that investors should dynamically adjust their risk budgets and preserve capacity to deploy capital when markets are under stress.

In this live recording from the Fiduciary Investors Symposium at Stanford University in September 2026, Scholes explores risk, drawdowns and why dynamic risk management should sit at the heart of the total portfolio approach.

What is Fiduciary Investors Series?

Through conversations with academics and asset owners, the Fiduciary Investors Podcast Series is a forward looking examination of the changing dynamics in the global economy, what a sustainable recovery looks like and how investors are positioning their portfolios.
The much-loved events, the Fiduciary Investors Symposiums, act as an advocate for fiduciary capitalism and the power of asset owners to change the nature of the investment industry, including addressing principal/agent and fee problems, stabilising financial markets, and directing capital for the betterment of society and the environment. Like the event series, the podcast series, tackles the challenges long-term investors face in an environment of disruption, and challenges investors to look differently at how they make decisions and allocate capital.