Last week, we showed you several “homerun” private market investments…
Investments that turned out to be highly profitable for early investors.
But like Matt explained yesterday, not every investment you make is going to work out so well. And that’s why it’s so important that you have a system in place for managing your early-stage portfolio.
Like Matt showed you, by using this system, you can reduce your risk and lock in consistent annual gains.
But today we’re going to show you another benefit to using this system:
Not only could it help you generate 27% a year across your early-stage portfolio...
But it could double the returns of your overall portfolio.
Here’s how it works...
The “Average Investor’s” Portfolio
If you’re like most folks, you probably have a balanced investment portfolio...
Some stocks, some bonds, and maybe a REIT or two.
That’s how the average investor puts their money to work—and that’s how they earn average returns.
Historically, a balanced portfolio has returned about 6% a year.
It’s not that 6% is “bad”…
But if you didn’t start investing until later in life…
Or if you’re still recovering from the 2008 crash...
Then 6% a year may not be enough for you. You may have to delay your retirement—or worse yet, you may have to keep working indefinitely.
But you have an alternative, and I’m going to share it with you right now.
All you need to do is put a very small portion of your portfolio somewhere new…
And this small change can help you double your overall returns.
Here’s The Secret...
As Matt showed you yesterday, historically, early-stage private equity investments have trounced the stock market:
As an asset class, early-stage investments have returned roughly 27% per year.
But there’s no need to move all your money into private equity to take advantage of those market-beating returns…
By adding just a tiny bit of this asset class to your existing portfolio, you can dramatically increase your overall returns.
In fact, CNBC recently reported that this asset class gives investors like you “an easy way to nearly double the equity return that your 401(k) is generating.”
Here’s how the math works:
Let’s assume you have a portfolio worth $100,000.
If you’re earning 6% per year by investing in stocks and bonds, over 10 years, your portfolio would turn into $179,000. That’s a 79% return. Not bad.
But now let’s look at what happens when we add some private equity…
We’re going to keep 90% of your assets—$90,000—in stocks and bonds. And then we’ll put the remaining $10,000 into private equity.
At 6% per year, over ten years, the $90,000 would turn into $161,000.
But given the 27% historical annual returns of private equity, over 10 years, the $10,000 allocation would turn into $109,000.
So in total, your portfolio would now be worth $270,000. That’s a 170% return.
So a 10% allocation to private equity more than doubled your returns:
They went from 79%... to 170%.
Get Ready for Next Monday
You just doubled the returns of your entire portfolio...
And all you had to do was put a small fraction of your assets—just 10%—into private equity.
And beginning next week, you’ll be able to do just that.
Thanks to Title III of the JOBS Act, starting next Monday, you and all investors will be able to invest in dozens of new private equity deals.
And we’ll be right here to help you make informed decisions.
So get ready!
And as always, happy investing.