<- back to the blog

Deal Box Daily Ep 15: "The Future of Asset Allocation || An Oral Essay by Deal Box CEO John Nance"

Published on Aug 24, 2021 by Brendan McShane

Youtube: Deal Box Daily Ep 15: "The Future of Asset Allocation || An Oral Essay by Deal Box CEO John Nance"

The way portfolios are constructed for today's investors, is not the way they need to be constructed in the future.

For an investor trying to preserve their wealth, it makes sense to continue with passive income / beta products. However, for investors trying to grow their net worth they need to look towards alpha products or private placement investing.

Investors need to move their capital towards earlier valuation sets of early stage companies with proven track records, sustainable growth, strong models. Select firms that have strict attention to detail in terms of corporate social responsibility and environmental sustainability.

Managers need to be thinking about how their business impacts not only shareholders but stakeholders society, financially and otherwise. Sophisticated investors are starting to take into account ESG practices of publicly traded firms.

Successful investing is not about finding the next cryptocurrency that's going to shoot up 200% in the next month. It's about selecting good companies with good business models that are growing and investing in them for the intermediate to long term.

The vast majority of investors today have portfolios that are extremely misallocated. They are overweight equities, overweight fixed income, underweight alternative investments, and very underweight venture capital/high conviction early stage companies.

There is going to be a large shift in the way capital is directed from traditional mega caps businesses into forward-thinking early stage companies that are solving problems in a way that the public and government want to see companies operate.