Building on better and bigger

We've already explored how making your portfolio Better—through meaningful diversification—and Bigger—by maximizing capital efficiency—can create a more robust approach to investing. But even the most efficiently scaled portfolio is still limited if it only invests in public markets.

A Broader portfolio expands beyond stocks and bonds to include private market investments—assets not traded on public exchanges. These investments, long utilized by institutions such as pension funds and endowments, offer compelling advantages: higher return potential, unique sources of diversification, and different risk dynamics than publicly traded assets.

By incorporating private markets, investors can build an institutional-caliber portfolio designed for compounding wealth across multiple economic environments.

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Key components of a broader portfolio

Private markets encompass several asset classes, just like Public Markets, each offering unique advantages to your portfolio:

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Navigating the liquidity spectrum

One of the biggest differences between public and private investments is liquidity—the ability to buy and sell assets quickly. Stocks and bonds can be traded daily, but private investments often require longer holding periods. However, investors are compensated for this trade-off. The illiquidity premium refers to the additional return investors earn for committing capital to less liquid assets. 

While some private market strategies require commitments spanning a decade or more, others provide periodic access to capital—often on a monthly or quarterly basis. Understanding where an investment sits on the liquidity spectrum is crucial when integrating private markets into a portfolio.

From institutions to individuals

For decades, private markets were the domain of institutions—pension funds, endowments, and sovereign wealth funds—because they had both the scale to write large checks and the ability to generate strong returns independent of public market fluctuations. Today, these strategies are increasingly available to individual investors at accessible commitment levels.

Understanding the structural differences between public and private markets is crucial for making informed investment decisions. While private investments offer compelling return potential, they require careful selection, longer time horizons, and a thoughtful approach to portfolio construction.

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By incorporating private markets into your portfolio, you unlock a broader set of return drivers and risk management tools—creating an investment approach that is more resilient, diversified, and positioned for long-term success.

Private markets play a vital role by offering exposure to assets that behave differently from stocks and bonds, helping to smooth returns, reduce reliance on public markets, and capture additional sources of growth. Whether through private equity, private credit, or infrastructure, these investments complement traditional holdings and strengthen overall portfolio stability.

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Complementing better and bigger

Integrating Broader with our Better and Bigger principles creates a well-rounded investment strategy—one that is accessible to individual investors yet sophisticated enough to meet the standards of institutional portfolios:

• Better: Enhanced diversification improves the risk-return tradeoff for investors.
• Bigger: Capital efficiency techniques amplify the impact of your diversified portfolio.
• Broader: Access to private markets further diversifies and strengthens your investment foundation.

Together, these principles don’t just create a more resilient portfolio—they position investors for more consistent compounding, stronger risk-adjusted returns, and the ability to thrive across market cycles.

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