Last week in Rio, Michael Phelps went out on a high note:
After leading the U.S. swim team to victory in the 400-meter relay—and receiving a record-high 23rd Olympic gold medal—Phelps hung up his goggles and retired.
Meanwhile, a similar situation was taking place closer to home:
The Dow, the Nasdaq, and the S&P 500 all hit record highs at the same time.
That might seem exciting, but historically speaking, it’s the kiss of death:
The last time these major indexes hit record highs simultaneously was on December 31, 1999—and here’s what happened next:
A burst bubble, a devastating recession, and the worst crash of the Nasdaq ever.
So I’ve got a question for you:
If history repeats itself, are you prepared for the consequences?
Sidelined for More Than a Decade
After the Nasdaq crashed in 2000, it didn’t recover in a week, a month, or even a year.
In fact, it didn’t recover in ten years.
Getting back to its pre-2000 levels took more than twelve years.
What if the same thing happens again now? What if the markets nose-dive, and they don’t rebound for more than a decade?
How would that affect your retirement plans?
How would it change your family’s lifestyle?
How would it change your life?
Ready for Action
If you believe that history repeats itself, now is the time to get prepared—before your nest egg is devastated yet again.
Given the record highs of all three major market indexes, now is the time to shift some of your capital into other asset classes.
More specifically, you need to shift capital into assets that can perform well even if the stock market gives up a lot of its gains.
One such asset is private equity. In particular, private start-up companies.
You see, when the stock market takes a tumble, start-ups can offer you shelter. Here’s why:
The returns from start-ups aren’t “correlated” to returns from the public market:
In other words, when the public markets “zig,” private equity “zags.”
As I wrote about in April, a study conducted by the $4.5 billion investment advisory, Cambridge Associates, shows that when the stock market and economy take a tumble, private equity outperforms other investments.
Not only that, but on average, the early-stage start-up market has generated annual returns of 27%.
That’s 4 to 5 times more than what most of us earn in the stock market.
One Simple Trick To Get You Started
For the last 83 years, start-up investing has been off-limits to most investors. Strict laws prohibited all but the wealthiest 1% from investing there.
But earlier this summer, a new law went into effect. It allows all citizens, regardless of their income or net worth, to invest in private deals.
Now is the time not just to educate yourself about this market, but to shift some of your capital here.
By putting just a small portion of your portfolio to work in private equity, you can decease your overall risk, while simultaneously increasing your returns.
In fact, with one simple trick, you can double your overall returns.