Investors worldwide have felt the winds of change ushering in the new financial era. Those investing in public markets – whether in stocks, bonds, or both – have witnessed a shaky performance of their portfolios, with little hope for stable growth this year.
Most of the major financial institutions, banks, and funds anticipate slowing GDP growth and uncertainty surrounding still-elevated inflation and long-awaited rate cuts. That said, thousands of investors worldwide have found refuge in private markets. Fabian Coray, Director of Investor Relations at Moonshot Investor Network and an expert in the field, shared his insights into the prospects of private markets.
“Unlike private markets, the outlook for public markets looks grim,” he said. “It suggests a considerable weakening in returns, with the traditional 60/40 strategy potentially yielding between 4-5%, in contrast to the historical average of 7-9%. At Moonshot, we anticipated this trend well in advance and have helped accredited investors within our circle since 2020 to access top-tier companies in private markets.” Regardless of the global uncertainty, Moonshot believes “[…] this year is going to be a year of great opportunities for the private market and our network, and we prepare in advance.”
“We enhance the knowledge aspect of our network to help members adapt to the upcoming financial era while introducing a range of products using the dollar-cost-averaging strategy [later referred to as ‘DCA’] on private markets – and that’s a very intriguing one. These opportunities enable individuals to invest easily and comfortably, allocating the funds evenly across each market cycle to maximize gains over the long term. Besides, it simplifies the investing process through complete automation, making it psychologically easy, as investors are relieved from the need to consciously decide to invest every month,” stated Mr. Coray.
Although even legendary investors like Warren Buffett highly praise and recommend DCA, there are questions about what one’s net worth should be to take advantage of this concept in private markets. At first glance, it seems substantial, as the minimum threshold to most private equity funds is between USD 250,000 to USD 1 million, or even more. Hence, there were some concerns about how exactly that would work for individuals with no institutional-sized capital. But Mr. Coray dispels these doubts: “[…] people don’t need to invest hundreds of thousands or millions of francs one-off and can start with just a couple of hundred per month.”
As many seasoned investors know, the DCA indeed works well in downturns, yet during a bull market, it is not at its best. Hence, a key consideration was how Moonshot plans to address this among its members, as the market still seems to be in the upturn.
“While the markets currently experience a rebound, which means the earlier you start investing the better, most people rarely have substantial funds and are willing to invest them one-off. The DCA, on the contrary, is the ultimate way to overcome the loss aversion bias. While each subsequent monthly investment may appreciate less than the preceding one, the investor still ensures that his purchasing power doesn’t decrease, as it would if he put the cash under the mattress,” Fabian answered. “Not to mention, it’s almost impossible to time the market and get in right at the bottom. While some try to argue this fact, I suggest they stress-test their opinion and rewind to the start of the COVID-19 crisis. ‘Did you genuinely predict when the market would hit rock bottom?’ Most of them were caught off guard with a market crash, not to mention the rock bottom and subsequent hypergrowth which were totally unpredictable.”
Headquartered in Zug, Switzerland, Moonshot propels individuals into an era where aligning with visionary investors to access lucrative returns in private markets becomes a more judicious choice than becoming a client of an investment bank or family office. Unlike most asset managers, who typically seek investors ready to commit millions for access to early-stage companies, Moonshot—as a network operated by and for its members—offers something different: access to sought-after companies for the cost of a dinner for two.
This post was authored by an external contributor and does not represent Biedex Markets Opinions and has not been edited for content. The information contained above is provided for informational and educational purposes only, and nothing contained herein should be construed as investment advice. Biedex Markets does not make any recommendation to buy or sell any security or any representation about the financial condition of any company.
