JP Morgan Caught Reading Crowdability

By Matthew Milner, on Wednesday, July 20, 2016

Has anyone ever “borrowed” one of your ideas and used it as their own?

If I’m not mistaken, it just happened to me—and I’m thrilled.

After all, isn’t imitation the sincerest form of flattery?

And since it was JP Morgan doing the imitating—and since the idea it borrowed was about how investors like you can make more money with less risk—

I thought you might be interested in hearing about it.

Core Investment Principle

Wayne and I believe that everyone should invest in start-ups.

That’s the core investment principle of Crowdability.

First of all, investing in start-ups is great for job growth and our economy.

Secondly, it’s the only investment strategy we’re aware of that can consistently help you turn a tiny investment into a fortune.

And thirdly, by shifting a small amount of your portfolio to start-ups, not only are you giving yourself a shot at big gains… but you’re also decreasing your overall risk.

This third point about start-up investing—that it allows you to enhance your investment returns and reduce your risk—is what I’m focusing on today.

Diversification Into “Alternatives”

If you’re like most folks, you probably have a traditional investment portfolio.

For example, maybe your portfolio consists of 70% stocks, 30% bonds.

But by moving just a small piece of your portfolio (say 10%) into “alternative” investments like start-ups, not only can you increase your returns—but you can reduce the risk of your overall portfolio.

That’s because alternative investments aren’t correlated to traditional investments. Meaning, when the stock market “zigs,” an alternative investment “zags.”

Let’s see the benefits of this zigging and zagging in a simple picture.

Here’s What Happens When You Add Alternatives

The graph below is based on the work of Nobel Prize winning economist, Harry Markowitz.

Essentially, the red line shows a “traditional” investment portfolio.

And the blue line shows a portfolio that includes alternative investments.

As you can see in this chart, adding alternatives allows you to increase your returns without increasing your risk. (To earn the same returns with a “traditional” investment portfolio, you’d need to expose yourself to far higher risk.)

That’s the benefit of adding a small amount of alternatives to your portfolio:

Higher overall returns, less overall risk.

You’re Welcome, JP Morgan

Last week, when I was doing some market research, I came across a chart.

It was in JP Morgan’s Q3 “Guide to the Markets” report, and it told the same story as the chart you just saw above.

It showed, with detailed data, how adding alternative investments like start-ups allows you to increase your returns, while decreasing the risk of your overall portfolio.

Although JP Morgan didn’t mention Crowdability by name, based on its point of view and its conclusion, I’d like to imagine that the company’s analysts have been reading our newsletter.

For example, maybe they read this recent post from Wayne »

In that post, Wayne describes how adding a small amount of private equity to your portfolio can help you more than double the returns of your overall portfolio.

Time for a Change

In the past, only wealthy investors—the kind who’d use private bankers from JP Morgan—had access to alternative investments like start-ups.

But now that everyone can invest in start-ups for as little as $100, all investors have the ability to enhance their returns and reduce their risk.

We hope you take advantage of it!

Best Regards,
Matthew Milner



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Tags: Diversification

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