This article is a follow-up to last week's article about 'How International Investing is for Everyone'. Individual investors should not fear investing their hard-earned money into international equities as well as other alternatives to the US stock market. Despite the constant yammering on CNBC, the US stock market has been a rather poor investment choice over the last decade. As mentioned in last week's article, the return over the last decade for the S&P 500 index has been practically nil.

Individual investors should not be looking to CNBC for investment advice but rather to successful investors to see how and where they invest. For over two decades, the most successful large institutional investors in the US have been the college endowment funds for Harvard and Yale. These two large endowment funds have consistently had annualized returns of 15%-20% for over two decades.

These large endowment funds have the same objectives as any long-term individual investor should - to generate a large a return as possible with minimal risk. These long-term institutional investors do not care about short-term movements in the financial markets, they look to invest for years or even decades. If an individual is investing for their retirement funds or for a child's education, they should be thinking along the same lines.

Where exactly have the Harvard and Yale endowment funds invested their funds? Both funds have a low allocation to US stocks. The funds have an average of only 12% - 15% in US stocks. Remember this compares to the average individual investor who has 97% in US stocks. Quite a contrast! Both funds have an average of 20% - 30% in foreign stocks. The percentage allocated to foreign stocks is almost evenly split between developed markets such as Europe and Japan, and developing markets such as Brazil and China. Again, quite a contrast to the average individual investor.

The endowment funds also have an average of 15% - 20% in bonds with approximately half of that amount in foreign bonds. The funds also invest in alternative asset categories: they have approximately 10% allocated to real estate and approximately 15% allocated to commodities. Their commodities investments into oil, natural gas, corn, soy, wheat, cooper, gold, etc. have done very well in the past several years. The remaining percentage of their funds are invested in hedge funds and private equity deals.

You may say - "So what? I'm not a large investor, I can't buy all of those things!" Well, actually you can. Obviously,everyone can easily get US stock exposure through a mutual fund or an ETF. The same is true for foreign stocks -there are numerous mutual funds and ETFs available. Both domestic and foreign bonds are also bought easily through a mutual fund or an ETF. Exposure to real estate(ignoring your home) can also be obtained through mutual funds or ETFs which invest in real estate companies.

It was once difficult for an individual to get exposure to commodities. That is no longer true - in the last year there have been numerous ETFs which have come to market giving investors either direct exposure to commodities or to the companies that are involved in producing commodities. There are now also several ETFs which give investors direct exposure to private equity and venture capital companies.

For the individual investor, probably the best way to set-up a long-term portfolio ala the Harvard and Yale endowment funds is through purchasing a basket of 8 - 10 ETFs (See my previous article 'Are ETFs Better Than Mutual Funds'). By using ETFs, setting up a portfolio for the new era of global investing is well within the reach of everyone's pocketbook.

For further reading, I suggest the recent book written by the former manager of the Harvard endowment fund, Mohamed El-Erian. He is now the co-CEO and co-CIO of the largest bond fund managers in the world,PIMCO. His book is titled "When Markets Collide:Investment Strategies for the Age of Global Economic Change.