When Maximilian Kunkel talks, it pays to listen.
Kunkel is a Chief Investment Officer for UBS, the largest private bank in the world.
Founded in 1862 and based in Switzerland, UBS manages $3.2 trillion for some of the wealthiest families in the world — including about half the world’s billionaires.
And here, in summary, is what Kunkel is saying right now:
If you’re looking to make money, forget stocks. Instead, focus on a different market.
Curious what this different market is? Let me tell you…
3 Strikes Against Stocks
As measured by any standard indicator like P/E ratios, stocks are at dangerously high levels right now. And any time the market gets too high, eventually it corrects or crashes.
But for experts like Kunkel, that isn’t the only reason to seek alternatives right now:
- First of all, the number of publicly-listed stocks has declined dramatically over the last 25 years or so. In the late 1990s, there were ~8,000 stocks. But by 2016, that number had dropped to ~3,600. Bottom line: there are far fewer stocks to choose from today.
- Secondly, the most important trend of our lifetime is the explosion of technology all around us. And yet, according to Kunkel, fewer than 2% of the world's tech companies are listed on the stock market. The rest of these companies are still private.
- And lastly, Kunkel believes that investing in the stock market leads to reactionary decisions. For example, when the market was rocked by Covid-19, many investors panicked and sold — and ended up losing a lot of money.
So, where is Kunkel advising his clients to invest instead?
Simple: private equity.
A Market-Beating Alternative
In a recent interview with Business Insider, Kunkel didn’t mince words.
He declared that, over the next 15 years, the returns from private equity will greatly outpace a traditional portfolio of stocks and bonds.
And here’s the thing:
Wayne and I couldn’t agree more.
We’ve been involved in the private markets for about 25 years now, specifically focusing on early-stage startups. After all, to continue Kunkel’s train of thought:
- There are an endless number of startups to invest in.
- There are an endless number of tech-focused startups to invest in, and
- The longer-term nature of startup investing makes it easier to adopt the type of “buy and hold” mentality that can lead to great financial success.
Furthermore, according to Cambridge Associates — an investment firm with clients like Bill Gates and the Rockefeller Foundation — over the last 25 years, early-stage private equity has generated average annual returns of 55% per year.
That’s about 10x higher than the average returns of the stock market.
Get Started Today
The research team at Kunkel’s bank recently identified three sectors that could provide startup investors with the greatest potential returns:
- Enterprise software.
- And consumer technologies including e-commerce and fintech.
Ready to do some startup investing in these sectors yourself?
First, check out our free weekly “Deals” email. We send this out every Monday at 11am EST, and it contains a handful of new startup deals for you to explore.
Second, check out our free white papers like “Tips from the Pros.” These easy-to-read reports will teach you how to separate the good deals from the bad.
And third, if you’d like to accelerate your success in startup investing, consider signing up for our online course, The Early-Stage Playbook, or join one of our premium research services like Private Market Profits.
To learn more, simply call our VIP Member Services department at 1-844-311-3191.