Learning from Goldman Sachs's investment picks for the rich

• Municipal and general obligation bonds. The typical money market fund yields less than 1 percent. If an investor buys municipal and general obligation bonds with the right credit conditions -- e.g., the issuers have high odds of being able to repay their obligations -- and the appropriate tax jurisdictions, investors can earn after-tax yields as high as six percent. While you probably can't get such high returns without buying those individual bonds, the average investor can seek out municipal bond funds that provide higher after-tax yields than money market funds.

• BBB Corporate Bonds. The partner also mentioned that some BBB-rated corporate bonds from companies that are able to meet their obligations can also offer fairly high yields (BBB is the lowest "investment grade" bond rating; below that are "speculative grade" -- or junk -- bonds). He mentioned the bonds of Comcast (CMCSA) as an example of such high-yielding corporate bonds. While it might be hard for the average investor to buy such bonds, corporate bond mutual funds -- such as Fidelity Capital and Income -- offer similar yields and some diversification.

• Oil and Gas Pipeline Master Limited Partnerships (MLPs). Oil and natural gas is distributed over pipelines, and since those pipelines have near monopolies, they can charge high rates and generate huge profits. The MLPs are supposed to pay out all their cash to investors, but they create complex tax-reporting and record-keeping requirements. If you're up for that, the average investor can buy such MLPs because they're publicly traded. One example from SeekingAlpha is Boardwalk Pipeline Partners (BWP), which yields 7.7 percent.

• Secondary market interests in private equity firms. Many limited partners in private equity firms, such as university endowments, have been desperate to raise cash over the last year. As a result, they've been eager to sell their previously illiquid interests in private equity firms. After considerable due diligence on the future cash flows from the private equity firms, Goldman has scooped up some of them at a discount. The firm believes that its investors can earn returns in excess of 20 percent on these.

• Customized market index securities. Goldman has noticed that ETFs designed to track market indexes don't actually track those indexes. Goldman has fixed this problem by creating customized securities that track the indexes more accurately, and it expects these customized securities to regularly outperform the indexes by as much as 20 percent.

• Hedge funds. The partner told me that of all the different kinds of hedge funds out there, he's comfortable with those that meet two conditions: their portfolio managers have almost their entire net worth tied up in their funds, and the funds are seeking significant capital appreciation. Goldman screens the hedge fund universe and puts its clients in what it considers the best of the funds that pass these two tests.