Today we’ll show you a simple trick...
It can help you more than double your portfolio’s returns.
You see, if you’re like most investors, you have a portfolio of stocks and bonds. You’ve been told this can help you generate more “consistent” returns.
And as you’ve probably discovered, this approach does deliver consistent returns—consistently crappy returns.
Today we’ll show you a better way:
And to take advantage of it, you only need to do one simple thing.
The “Old” Way
Most individuals have a portfolio of stocks, bonds and other fixed income investments.
Historically, a balanced portfolio like this has returned about 6% per year.
Today we’re going to show you a new way to manage your money—a better way.
To be clear, this strategy is unconventional. It requires you to invest a portion of your portfolio into an asset class that most folks consider “high risk.”
But if you look at the facts, it isn’t high risk at all. That’s because you’d only be allocating a tiny piece of your portfolio towards it. The vast majority of your capital—90%—will be kept in ordinary stocks and bonds.
What is this new asset class?
Private equity.
How The Pros Do It
This might sound crazy…
How could investing a tiny piece of your capital into private equity double your returns? It seems too good to be true.
But based on a recent study performed by Pacifica Strategic Advisors, an independent advisory and research firm, allocating a small portion of your portfolio to private equity investments could take your annual returns up to 16%—that’s far more than double the historical average.
But we’re not just “cherry picking" with this one example…
The largest and most sophisticated institutional money managers and pension funds have been adding private equity to their portfolios for decades. In fact, as Steve Judge, President of the Private Equity Growth Capital Council (PEGCC) said:
"Time and again private equity has proven that it's the single-best asset class for public pensions, by delivering superior returns over longtime horizons."
And as a recent CNBC report on individual investors concluded, private equity investing is “an easy way to nearly double” your portfolio’s returns.
Here’s how it works...
Doubling Your Returns—By The Numbers
Let’s say you have $100,000 to invest, and you put it into stocks and bonds.
If you earn 6% per year, over 10 years, your portfolio would turn into $179,000.
Not bad—but now let’s look at the numbers with our new strategy:
Let’s take 90% of your assets—$90,000—and put them into stocks and bonds. Over ten years, that would turn into $161,000.
With the remaining $10,000, we’ll create a portfolio of private equity investments.
Given the 27% historical annual returns of private equity, over 10 years, that $10,000 would turn into $109,000.
So, in total, your portfolio is now worth $270,000.
To sum things up:
Over ten years, the “traditional” portfolio returned 79%...
And the portfolio with a small 10% allocation to private equity returned 170%.
That is how you more than double your returns.
Another Way to Double Your Returns
The reason the math works out this way is because private equity tends to generate high returns.
Sure, taken individually, a young, private company might be risky…
But by investing in a diversified basket of these companies—and by allocating no more than 10% of your total portfolio towards them—you can turn even a modest investment into windfalls of profits.
But, look: maybe you’re not quite ready to invest in private companies…
That’s why, over the next few weeks, we’ll be showing you another type of investment that could allow you to see similar gains.
We’re not going to tell you what it is yet, but maybe you’ve already guessed…
Leave a comment below and let us know what you think it is.
Happy investing.
Best Regards,
Founder
Crowdability.com
