Over the past decade, more than 5 percent of university endowments performed better than the top 1 percent of all large institutional funds, according to a study by the National Association of College and University Business Officers.

The study found the average portion of endowment portfolios invested in vehicles other than stocks and fixed income tripled over the past decade, to 17 percent of assets. The allocation given to hedge funds increased the most, followed by real estate, private equity, natural resources and venture capital.

Although diversification is a fine idea for everyone, individual investors usually aren't so adventuresome. They're more likely to diversify among types of stocks and bonds, wary of the potential risks elsewhere.

"It is actually quite easy for individuals to obtain the same diversification the institutional funds have," said Jeffrey Saut, managing director at Raymond James & Associates in St. Petersburg, Fla. "For example, they can invest in exchange-traded funds or closed-end funds, as well as in hedge-like mutual funds such as Quaker Strategic Growth Fund, whose manager has the ability to do anything he wants."

Quaker Strategic Growth A (QUAGX) had a 12-month annualized return of 23 percent and a three-year annualized return of 15 percent, both in the top 5 percent of large growth and value funds. It trades rapidly, has significant swings and employs tactics such as shorting stocks and buying index put options, which allow someone to sell securities at a specific price at a specified time.

It requires a 5.5 percent "load" (sales charge) and $2,000 minimum initial investment, with an annual expense ratio of 1.90 percent.

"Large institutional funds have the advantage of money coming in regularly, so they can take advantage of down markets," said Alfred Goldman, chief market strategist for A.G. Edwards & Sons in St. Louis. "Individuals can do the same through dollar-cost averaging, which involves putting in the same amount each and every month whether the market is up or down."

Pervasive gloom is "so thick you can cut it with a knife," Goldman said, noting that Brazilian supermodel Gisele Bundchen said she no longer wants to be paid in U.S. dollars and Venezuelan President Hugo Chavez has announced the dollar "is through." Widespread cynicism indicates a market bottom, Goldman said, which means stocks are on sale right now.

Investors hoping to emulate institutional investors should first turn to the portfolio diversification of a growth fund with a solid five-, 10- or 15-year record, he said. Avoid funds that may have just hit it big.

"The tried-and-true way for individuals to make money — and I realize this can bore some people — is to own a good mutual fund and put money in regularly," Goldman said. "So long as our economy continues to grow, as it basically has done since 1776, investors will do well."

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Andrew Leckey answers questions only through the column. Address inquiries to Andrew Leckey, P.O. Box 874702, Tempe, Ariz. 85287-4702, or by e-mail at andrewinv@aol.com.