I’ve been wondering recently about investment returns of wealthy colleges. For example, NPR’s most emailed story right now is on advice from Yale’s investment “wiz”. He earned a 28% return on Yale’s investment last year, and has averaged around 17% return. Here’s the thing: aren’t rates of return tied to risk? Am I crazy? I thought that the higher return, the higher risk (in general) you were assuming. So are these super elite universities assuming lots of risk with their endowments? If so, isn’t just a matter of time before the risk “cashes in” and the endowments take a pretty hard hit? Or are these folks really wizzes? I don’t get it. I’m not sure why I’m thinking about this. I don’t have much money to invest. And in terms of thinking about these endowments, this is a fairly minor question (the more major one, in my mind, is why they’re not using them to transform the class distribution of their institutions).