Smooth Sailing or Stormy Waters?
Updated: Oct 27
Calm the rough currents with alternative investments
The beautiful sparkles of the water in the sunshine. The fresh, brine-laden breezes as you come about—these are the joys of sailing. Even if you’re a motorized matey, you know the delightful feeling of heading out to the lake or ocean with friends and family on board.
You also know that storms roil up out of nowhere and can pose an imminent threat to anyone out on the water. If they’re not prepared. If they’re arrogant about an iffy forecast and set sail regardless of advice. Yes, even if they do everything they know to do, they still might be calling in the Coast Guard if the storm’s fierce enough to flip their boat, tossing everyone on board into the sea.
If you bear with me, I’d like to illustrate the principles from our new eBook, The Case for Private Investments with some terms you might know if you’re not a landlubber. Whether you’re making sure your “mast is lashed” or your “point of sail” is on course, these terms will help the high-value investor navigate safely into retirement, that port you’ve been working toward your whole life.
Sailing a yacht on your own is one of the most exhilarating feelings there is. But trying to sail your investment portfolio through a storm without expert guidance can be a scary endeavour.
Just like an unforeseen storm, disruptions to public markets happen in moments. The serious declines over the past decade took years to recover from. Private investments remain a proven way to diversify so you’re not at the mercy of the waves of boom and bust on Wall Street. Especially if you’re near retirement. In fact, the largest endowments in the U.S. allocate over 70% of their billion-dollar portfolios to private investments to avoid this volatility.
Some yachts have what’s called an Iron Mike—just another name for autopilot. Is your investment advisor using his Iron Mike when it comes to your portfolio? If your portfolio is currently in autopilot you may still want to have an expert captain at the helm should stormy markets arise. You may want a Captain with the expertise to look into private investments like private equity, real estate, lending, credit, or special purpose acquisition companies (SPACs) –all of which have had incredibly strong returns in the past few years.
When you reduce sail area to control the yacht more easily in high winds or rough and choppy waters, you’re correcting your power and speed and getting ready for what’s to come. Earlier this month, a 650+ point drop in the stock market and bounce-back recovery to nearly all of its value indicates common volatility in the public market. The U.S. Fed is talking about removing safeguards that were put in place during COVID-19 and a huge spending bill is winding its way through the halls of Congress. Gas prices are ridiculous and many believe the U.S. is currently heading into inflation territory if we’re not there already.
Alternative investments can protect your hard-earned money in times like these. Plus, they’re not an all-in proposition—only high-value portfolios are even eligible. That means you get the opportunity you deserve as a successful person—the opportunity to use your skills and funds to their full potential.
These are only a few reasons the high-value investor should get into private investments ASAP. But don’t just dip your toe in the water (Sorry! Last boating metaphor, promise!). Download the Private Investment Guide if you haven’t already or contact us for a free, no-obligation call that will answer all your questions.