Three-percent annual returns.
That’s what investment-bank Goldman Sachs believes stocks will deliver over the next decade.
If that’s the case, putting your money into stocks could be a big mistake.
Today, I’ll explain the surprising place to put your investment dollars instead.
Fun While It Lasted
The stock market soared in 2023 and 2024.
After delivering 24% returns in 2023, the S&P 500 is on pace for 22% returns this year. The last time the market gave us 20%+ in back-to-back years was decades ago, in 1997-1998.
But now forecasters are saying the party is over…
The Stock Market is Looking Like a Dud
Sputtering global growth, geopolitical uncertainty, staggering national debt, inflated stock valuations — add it all up, and experts are forecasting rough times ahead for stocks.
For example, as reported in Bloomberg, Goldman Sachs is forecasting annualized returns of just 3% for the S&P over the next decade. Factor in inflation, and those returns will feel closer to 1%!
That’s abysmal. And it’s scary. It’s nearly impossible to build a nest-egg with returns like that.
That’s why it’s time to look elsewhere…
How About 55% Annual Returns Instead
For example, consider investing in early-stage startups.
Startups are one of the most profitable asset classes of all time.
According to Cambridge Associates, an investment advisor for the likes of Bill Gates and The Rockefeller Foundation, over the last twenty-five years, startups have returned an average of fifty-five percent per year.
That’s about ten times higher than stocks!
And if you end up investing in an Uber or Meta or Airbnb, you could potentially turn just a few hundred dollars into millions.
But perhaps you’re wondering something:
Won’t the same factors expected to drag down stocks do the same to startups?
Startups are Resilient
Perhaps surprisingly, startups can thrive during times of economic uncertainty. There are a few main reasons for this:
- When there’s turmoil and layoffs, it’s easier for startups to hire. There’s greater access to talent that’s ready and eager to work.
- When it’s harder to raise funding, startups are forced to focus on their core business, rather than following every move their competitors make.
- With no legacy operations to slow them down, startups can quickly adapt to changing environments — and often reap the rewards.
In fact, some of today’s most valuable companies got started during bad times…
Billion-Dollar Companies That Got Started in Bad Times
Walt Disney launched in 1929, just as the Great Depression was starting. Microsoft was founded during the oil-embargo recession of 1975. And video-game company Electronic Arts was founded in 1982, during one of the worst downturns in history.
Need more recent proof? Airbnb was founded at the start of the Great Recession. In 2009, venture-capital group Sequoia Capital invested $585,000 into Airbnb. When Airbnb went public in 2020, the value of Sequoia’s stake soared to $8.4 billion.
Then there’s Uber, another startup that launched during the Great Recession. Hyatt Hotels, Trader Joe’s, Slack, FedEx, WhatsApp, Square, Instagram, Pinterest — every one of these companies got started in terrible economic times, became an extraordinary success story, and delivered life-changing returns to its earliest startup investors.
And here’s something else to consider…
It Doesn’t Take Much to Make a Difference
As mentioned earlier, startups have delivered average annual returns of fifty-five percent over the past twenty-five years.
At that rate, even allocating 5% of your total portfolio to startups could change everything.
For example, a $10,000 investment would turn into more than $800,000 in ten years.
And even $500 could turn into more than $40,000.
Two Easy Ways to Get Started
So, what’s the downside?
Simple. For most folks, investing in startups is something new. And the truth is, for newcomers, this can be a tricky and risky market to understand and navigate.
But that’s why Crowdability is here. Our mission is to educate ordinary investors on the ins and outs of startup investing — and bring you what we believe are the best opportunities.
So keep an eye on your inbox for our free, weekly “Deals” email. We send it out every Monday at 11 am EST. It features four new early-stage startups to explore.
And if you’re looking to build a high-quality portfolio of startups more quickly, take a look at Private Market Profits, our premium research service that delivers one new startup recommendation each month.
Happy investing!
Best Regards,
Editor
Crowdability.com
