Three Reasons You HAVE TO Invest in Pre-IPO Companies

By Matthew Milner, on Wednesday, May 9, 2018

For the last twenty years, Wayne and I have been “hooked” on investing in pre-IPO start-ups.

We still invest in traditional assets like stocks, bonds, and real estate...

But investing in start-ups gives us something extra — something other investments can’t.

Part of the “addiction” is the market-beating returns. But there’s more to it than that.

So today we’ll reveal the three reasons we got hooked on start-up investing…

And the three reasons we believe investors like you should get hooked, too.

#1: A Little Bit Can Go a Long Way

Here’s the first thing you need to understand about start-up investing:

Even a tiny bit of it can go a long way.

Let me explain what I mean…

Most investors understand the benefits of a diversified portfolio. For example, maybe your portfolio consists of about 50% stocks, 25% bonds, and 25% real estate.

But as it turns out, adding even a tiny bit of “private equity” to your portfolio — in other words, investing a small amount into private start-ups — can have a huge impact:

According to a recent study from SharesPost, an expert in private securities, allocating just 6% of your assets to start-ups can boost your portfolio’s overall returns by 67%.

With a 67% boost, instead of earning, say, 10% a year, you’d earn 16.7% a year.

Let’s see what this difference would add up to with a hypothetical portfolio of $100,000…

Double Your Portfolio with Start-Ups

If you earned average returns of 10% a year, in ten years, a $100,000 portfolio of stocks, bonds, and real estate would turn into about $259,000.

Not bad...

But in that same timeframe, a portfolio that includes a 6% allocation to start-ups (that’s just $6,000) would grow to $468,000.

As you can see, by adding a small allocation to start-ups, you nearly doubled the size of your investment portfolio.

Keep in mind, these returns include the winners and the losers…

And if you happen to invest in a start-up like Facebook, Uber, or Instagram — the type of investment that can deliver 20,000%+ returns — you could become a millionaire overnight.

But higher returns aren’t the only reason to get hooked on start-up investing…

#2: Portfolio Protection

You see, not only can adding start-ups to your portfolio increase your overall returns…

But it can also decrease your risk.

That’s because start-ups are what’s called a “non-correlated asset.”

In other words, when the market zigs, they can zag. That means, in times of market turbulence, start-ups can help smooth out all the ups and downs of your overall portfolio.

For many investors, this “portfolio protection” helps lead to a better night’s sleep.

#3: This One Might Surprise You

But there’s also a third reason you should get hooked on start-up investing.

I’ll let Wayne explain more tomorrow…

But once you read his article, I think you’ll understand why we got hooked on start-up investing — and why you should get hooked, too.

So stay tuned…

Wayne will be emailing you tomorrow morning at 11am EST.

Happy Investing

Best Regards,
Matthew Milner

Founder
Crowdability.com

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Tags: Diversification IPO

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