The coronavirus pandemic has unleashed a wave of volatility across the markets…
From its all-time high of 3,386 on February 19, the S&P 500 bottomed at 2,237 on March 23. That crash sent us into bear market territory.
Since then, the markets have rallied 27%, recouping more than half of its losses. In the interim, we’ve seen intraday moves of 5% to the upside and downside.
Personally, I’ve lost count of how many times these wild swings have triggered the market’s circuit breaker.
We understand it’s difficult being an investor in this kind of environment. The volatility can be stomach-churning.
One way to smooth the ride is asset diversification. It’s the core of our philosophy at PBRG.
And in today’s essay, I’ll reveal a “hidden” market that offers the promise of life-changing gains without all the volatility we’re seeing in the stock market.
The $5 Trillion Hidden Market
I’m talking about private markets.
Here’s what Daily editor Teeka Tiwari said about them…
During my time on Wall Street, I discovered a secret… There are really two markets: The “hidden” market, where the rich and connected make their millions… and the stock market for everyone else. The hidden market is private equity. And it’s the playground of venture capitalists.
According to McKinsey & Company, this market has over $5 trillion in assets under management. For years, Wall Street has walled it off from you. And for good reason: The gains it’s pocketing are truly massive – far bigger than what you get with regular stocks.
For example, over the last 20 years, the U.S. Venture Capital – Early Stage Index has returned an average of more than 86% per year.
Yet most of the well-known stock indexes – like the S&P 500, Nasdaq, and Russell 2000 – have returned an average of less than 7% per year.
That’s not a typo. Early-stage, private companies have returned over 12x what public companies have during the past two decades.
And now, new rules from the Securities and Exchange Commission allow ordinary investors to get in the game and invest in private companies before they go public…
They’re called Regulation CF and Regulation A+ offerings. The main difference between the two is the amount of money each can raise.
Under the current rules, Regulation CF offerings can raise up to $1 million from the public. Regulation A+ offerings can raise up to $50 million.
You can often invest in a Reg CF offering with as little as $100. And minimums for Reg A+ deals generally range from $250–1,000.
In the best of times, private markets outperform public markets. But they do even better during volatile times…
Time to Buy Sweetheart Deals
Remember, since these “sweetheart deals” are private, they don’t trade on a public exchange. So even when wild market volatility hits, their share prices stay the same.
Now, you can’t buy private startups from your brokerage account. And your investment adviser will probably never tell you about them.
So if you want to explore private equity investing, consider crowdfunding platforms like SeedInvest and MicroVentures. They list dozens of startup companies raising money from the general public. In some cases, you can get started with as little as $100.
But always do your due diligence and never bet more than you can afford to lose.
Regards,
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Chaka Ferguson
Managing Editor, Palm Beach Daily
P.S. As I mentioned earlier, while other stocks have been hammered, the prices of private deals in Teeka’s Palm Beach Venture portfolio have remained stable.
And since launching Palm Beach Venture last year, Teeka has uncovered several opportunities to invest alongside billionaires in sweetheart deals – before they go public.
In fact, you can still get into three of these private deals for as low as $1 per share with up to 3,900% upside. But you must act now. These companies will be closing their doors to new investors soon…
To learn more about these sweetheart deals, click here.