NPR’s All Things Con­sid­ered recently pro­filed David Swensen and analysed his invest­ing strat­egy (Swensen is Yale University’s head investor):

Yale Uni­ver­sity recently announced a 23 per­cent return on its invest­ments, swelling its endow­ment to a whop­ping $18 bil­lion. The man behind that invest­ment suc­cess is David Swensen, one of the most gifted investors in the world. He’s made an aver­age 16 per­cent annual return over 21 years — bet­ter than any port­fo­lio man­ager at any other university.

Nobody has num­bers that good. Not at Har­vard, Prince­ton, Stan­ford, or any foun­da­tion or pen­sion fund; Swensen con­sis­tently beats them all. […] Yale pays Swensen $1.3 mil­lion a year. That sounds impres­sive until you real­ize that, with his track record, if Swensen started his own hedge fund, he could earn $50 mil­lion to $100 mil­lion a year.

Swensen’s invest­ment for­mula takes the pain out of asset allo­ca­tion. All you need to do is adjust the per­cent­ages and fund loca­tions depend­ing on your age, your assets, and your risk appetite. Perfect.