You cannot invest like Harvard or Yale

This month, Smart Money ran article touting that you could invest like these two stalwarts of the endowment universe. They looked at the allocation models of the two endowments, spoke with the managers, and formulated a mix for the retail investor to follow. I'm afraid that this is an impossibility. You or I or anyone with less than hundreds of millions of dollars cannot ape Harvard or Yale. These institutions have access to the best managers in the world. They have large staffs who do nothing but analyze investment performance. A great deal of their endowments are invested in private equity, venture capital, oil & gas partnerships, timber, and other highly illiquid assets and strategies. You cannot get PE like returns by investing in the PowerSharesListed Private EquityPortfolio(PSP). Investing in Rayonier(RYN), is not the same as owning millions of acres of timberland. Unless you are willing to commit the time and money required to getting above-market returns, do yourself a favor and invest in index funds and ETFs. In fact, this is what David Swensen, Yale's chief investment officer, advises in his book, Unconventional Success: A Fundamental Approach to Personal Investment.