Alaska's Fund Diversifies -- So Should You

Do-it-yourself investors can't mimic large endowments or sovereign wealth funds, but they can learn about asset allocation from them.

Today's example is the Alaska Permanent Fund, which was established in 1976 to pay a royalty (or dividend) to the residents of Alaska out of the tax collected from the movement of oil. It's the closest the U.S. comes to having a sovereign wealth fund. The fund is managed like an endowment with various investments.

The fund's Web site provides transparency in terms of asset allocation and performance, and offers investors the chance to see what went right and to benefit from its mistakes. ...