Why NOW Is the Time to Ditch Traditional Investment Portfolios

The classic 60/40 portfolio is no longer enough on its own. In this video, Dan, founder and CEO of Tailored Wealth, explains why relying only on traditional stocks and bonds can leave you exposed in today’s environment of inflation, rising interest rates, and shrinking public markets, and why sophisticated investors are increasingly adding private equity and alternative investments (private credit, infrastructure, real assets) to seek higher returns, better diversification, and more resilient portfolios. He covers how institutions have used these strategies for decades, what’s changed to open access for individual investors, the trade-offs (illiquidity, fees, complexity), and why now may be a uniquely attractive entry point.

• The 60/40 portfolio is under pressure.

  • For decades, 60% stocks / 40% bonds was the “gold standard” for balanced investing.
  • In 2022, both stocks and bonds dropped together, challenging the idea that bonds always cushion stock declines.
  • Inflation, interest-rate spikes, and global volatility are stressing traditional diversification tools.


• Public markets are shrinking.

  • The number of publicly traded companies is roughly half of what it was in the 1990s.
  • More companies stay private longer and grow larger before IPO.
  • That means a lot of the best growth happens before stocks ever hit the public exchanges.


• Institutions have long embraced private markets.

  • Pensions, endowments, and mega-funds have invested in:
    • Private equity
    • Private credit
    • Infrastructure
    • Real assets (e.g., real estate, essential real assets with inflation linkage)
  
  
  • They’re not just diversifying, they’re pursuing the illiquidity premium: higher expected returns for tying up money longer.
  
  


• Private equity’s performance edge.

  • Historically, private equity has outperformed public markets over 5, 10, 15, and 20-year periods.
  • Research shows not only higher returns, but often with lower observed volatility (in part because it’s not priced minute-by-minute like public stocks).
  • Adding private equity to a traditional stock portfolio could add around 3%+ per year in returns over time in some studies and models.


• Alternatives can improve diversification, not just returns.

  • Private markets don’t move in lockstep with public stocks and bonds.
  • They can add:
    • More stable income (e.g., private credit)
    • Inflation protection (e.g., infrastructure, certain real assets)
    • Access to unique opportunities (middle-market companies, toll roads, renewable energy projects) that don’t show up in mutual funds.
  
  


• Types of private investments Dan highlights:

  • Private equity: Ownership in private companies, often earlier in their growth curve than public stocks.
  • Private credit: Lending to private businesses, often at double or triple the yields of traditional public bonds.
  • Infrastructure: Assets like toll roads, renewable energy, and essential services that often adjust with inflation.
  • Real assets: Tangible holdings with potential inflation linkage and diversification benefits.


• Risks and trade-offs (this isn’t a free lunch).

  • Illiquidity: Money may be locked up for multiple years, not weeks or months.
  • Complexity: Requires deep due diligence and strong manager selection.
  • Fees: Typically higher fees than standard ETFs/mutual funds, making manager quality critical.


• Why “now” may be attractive.

  • Private equity valuations have reset after the 2022 slowdown, potentially better entry prices.
  • Dry powder (uninvested capital) is at all-time highs, meaning managers have a lot of money ready to deploy into new deals.
  • Deal activity is picking up, and private credit markets are strong, creating opportunities in lending and financing.


• Access has been democratized.

  • You no longer need $5M+ to participate.
  • Many high-quality funds now have minimums closer to $25,000 (subject to eligibility rules).
  • Structures have improved: simpler documentation, better liquidity provisions in some vehicles, and standardized tax reporting.


• Bottom line:

  • In a complex, fast-changing world, sticking only to a 60/40-style portfolio may mean leaving opportunity and resilience on the table.
  • Private equity and alternatives are moving from “fringe” to “core” components of a modern portfolio for many serious investors.
  • Execution and risk management matter, this is best done with advisors who understand private markets.

• (00:00) – Introduction & scope. Dan introduces himself as founder and CEO of Tailored Wealth and frames the discussion: traditional stock-and-bond portfolios are under strain, and smart investors are expanding into alternatives and private equity.
• (00:29) – The fall of the 60/40 “gold standard.” He explains how the classic 60% stock / 40% bond mix has been challenged, citing 2022 when both stocks and bonds fell simultaneously, undercutting the idea that bonds always protect in downturns.
• (00:56) – Macro pressures on traditional portfolios. Dan highlights inflation, rising interest rates, and global volatility as forces shaking the foundation of old-school diversification.
• (01:20) – Shrinking public markets. He notes that the number of public companies has been cut in half since the 1990s, and that more businesses stay private longer meaning many of the strongest growth stories happen before IPO.
• (01:20–01:43) – Where new opportunity lives: private markets. Dan identifies key alternative segments: private equity, private credit, infrastructure, and real assets, emphasizing that institutions (pensions, endowments, big funds) have used them for years.
• (01:43–02:11) – The illiquidity premium. He explains that institutions aren’t just diversifying, they’re intentionally seeking higher returns for locking up capital, a concept known as the illiquidity premium.
• (02:11) – Performance of private equity. Dan shares that private equity has historically outperformed public markets over multi-decade timeframes and often with lower observed volatility, and that blending it into a stock portfolio might add ~3%+ annual return in some models.
• (02:39–03:27) – Why alternatives matter beyond returns. He stresses that alternatives:

  • Behave differently than stocks/bonds, improving diversification.
  • Provide access to pre-IPO growth and unique assets (toll roads, renewables, middle-market businesses).
  • Can generate higher income and inflation protection via private credit and infrastructure.


• (03:27–03:52) – Risks & realities. Dan is candid about drawbacks: illiquidity, complexity, and higher fees, reinforcing the need for due diligence and skilled partners.


• (03:52–04:38) – Why timing may be favorable now. He notes that valuations have reset, dry powder is at record highs, deal-making is reviving, and private credit is strong creating a fertile environment for new investments.


• (04:38–05:02) – Democratization of access. Dan explains that where private funds previously required millions to enter, many high-quality options now start around $25K, with simpler structures and more accessible reporting.


• (05:02–end) – The new portfolio reality & CTA. He concludes that private equity and alternatives should no longer be seen as fringe; they’re powerful building blocks for modern portfolios and invites viewers to reach out to Tailored Wealth at yourtailoredwealth.com.

In this video, Dan argues that the traditional 60/40 stock-and-bond portfolio is no longer sufficient on its own for investors who are serious about growing and protecting their wealth. He begins by revisiting the long-held belief that bonds offset stock volatility, noting that 2022 was a wake-up call: both stocks and bonds fell together, undermining the core premise of the classic balanced portfolio. Layer on persistent inflation, rising interest rates, and geopolitical uncertainty, and it’s clear that the old toolkit is under stress.

Dan then highlights a structural shift that many individual investors overlook: the shrinking of public markets. There are roughly half as many publicly traded companies as there were in the 1990s, in part because more companies are staying private longer and scaling up substantially before ever going public. As a result, much of the most powerful growth in modern businesses now occurs behind the scenes in the private markets, long before a stock shows up in your brokerage account.

To access those opportunities, he makes the case for expanding into alternatives and private equity. Institutions like pension funds, university endowments, and billion-dollar investment pools have been allocating significant portions of their portfolios to private equity, private credit, infrastructure, and real assets for years. It’s not just about being fancy or complex, they’re pursuing the illiquidity premium: higher potential returns in exchange for tying up capital over longer periods.

On the performance front, Dan notes that private equity has historically outpaced public markets over 5-, 10-, 15-, and 20-year horizons, and often with lower observed volatility. In practice, that means that adding a measured allocation of private equity to a traditional stock portfolio could add in the neighborhood of 3% or more to annual returns in many hypothetical models. At the same time, alternatives can improve overall portfolio resilience, because they don’t tend to move in lockstep with public stocks and bonds.

He breaks down some key categories. Private equity allows investors to participate in a company’s growth earlier in its life cycle, when value creation is often most powerful. Private credit offers lending opportunities to private businesses, frequently at yields double or triple those available in public bond markets. Infrastructure from toll roads to renewable energy projects, often comes with cash flows that adjust with inflation, creating a potential hedge in an environment where prices are rising. Real assets can provide tangible exposure that behaves differently from standard equity and bond holdings.

Dan is clear, however, that none of this is risk-free. Private investments are generally illiquid; you can’t sell them with a click like a stock or ETF, and capital may be tied up for a number of years. These vehicles are also more complex, requiring detailed due diligence and careful manager selection, and they often carry higher fees than traditional funds. That’s why he emphasizes working with partners who know how to source, evaluate, and integrate these investments thoughtfully into a broader plan.

He then explains why he believes right now is an especially interesting moment to consider private markets. Valuations in private equity have reset following the 2022 slowdown, which means you may be able to invest at more attractive entry points. There is a record amount of “dry powder”, uninvested capital, waiting to be deployed, and deal activity is picking up again. Private credit markets are robust, offering rich opportunities for investors willing to lend into the real economy.

Perhaps the biggest change for individual investors is the democratization of access. Historically, many private funds required $5 million or more just to get in the door. Today, Dan notes, there are high-quality private vehicles with minimums around $25,000 (subject to accreditation and other rules), simplified structures, improved liquidity features in some cases, and standardized tax reporting. The “club” is no longer reserved exclusively for institutions and ultra-high-net-worth families.

He closes with a clear message: if you’re truly committed to building and protecting wealth in a complex world, you can’t afford to rely solely on a traditional 60/40 portfolio. Private equity and alternatives are moving from “nice-to-have” to “core components” of a modern investment strategy for many business leaders and sophisticated investors. The key is to integrate them prudently, with an eye on risk, time horizon, and your overall financial plan. Dan invites viewers to connect with Tailored Wealth through yourtailoredwealth.com to explore how private investments might fit into their personal strategy.

Dan: Hi, I'm Dan Pasone, founder and CEO of Tailored Wealth. And today we're going to dive into a conversation that could completely change the way that you think about building wealth. If you've been relying solely on a traditional stock and bond portfolio to grow and protect your wealth, well, it's time to broaden your perspective and your portfolio because the smartest investors are gaining exposure in alternatives and private equity.

Dan: And today I'm going to show you why. For decades, the 60-40 portfolio, 60% stocks, 40% bonds, was the gold standard for balanced investing. But let's be honest, that traditional portfolio today is struggling. In 2022, both stocks and bonds lost value at the same time. And the old belief that bonds protect you when stocks fall, well, that's currently being challenged.

Dan: Inflation, rising interest rates, global volatility, they're shaking the foundation of traditional diversification. And if you're sticking to only the public markets, well, you're playing the shrinking game. The number of public companies has been cut in half since the 1990s. And more companies are staying private longer and growing bigger before they ever hit public markets.

Dan: Meaning the best growth stories, well, they're often happening before the IPO bell even rings. Where do you find new opportunities? In private markets, private equity, private credit, infrastructure, real assets. Institutions think pensions, endowments, and billion-dollar funds have been investing this way for years.

Dan: They're not just diversifying. They're capturing what we call an illiquidity premium, which means higher returns for locking up capital and thinking long term. And now, for the first time, many individual investors like you can access these opportunities, too.

Dan: Now, let's talk numbers. Historically, private equity has outperformed public markets over the 5, 10, 15, and even 20-year periods. And research shows it's not just higher returns. It's oftentimes higher returns with lower observed volatility. In fact, adding private equity to a traditional stock portfolio could add 3% or more to annual returns over time. Think about that. Same timeline, same market cycles, but far better results.

Dan: Adding alternatives to your portfolio isn't just about chasing returns. It's about building a portfolio that is better diversified. Private markets behave differently than public stocks and bonds and can add real stability during turbulent times.

Dan: Poised for higher growth, private equity gives you access to high growth companies before they hit Wall Street when the real value is created. Accessing unique opportunities, toll roads, renewable energy projects, private middle market companies, opportunities you'll never find in a typical mutual fund, creating income and protecting against inflation. Private credit often offers double or triple the yields of public bonds, and infrastructure investments tend to rise with inflation, and in today's world, that's a powerful combination.

Dan: Now, let's be real. Private equity isn't risk-free. Lack of liquidity is a real consideration because oftentimes your money is locked up for years, not just months, and there's complexity. These investments require due diligence and strong manager selection. And higher fees are common, which is why it's critical to work with partners that know how to navigate this space.

Dan: But with the right guidance, the potential advantages could far outweigh the risks, especially if you're investing with a long-term mindset. And right now, there may not be a better time to get involved. Private equity valuations have reset since the 2022 slowdown, meaning you can invest at much more attractive prices.

Dan: Dry powder, which is code word for undeployed capital, is at all-time highs, which means that there's a lot of capital available to fund growth. Deal making is also picking back up and private credit markets are stronger than ever. So, if you're looking for the next set of great private investments, this could be it. And the best news, access to private investments has been democratized.

Dan: You no longer need $5 million just to play. Today, high-quality private funds start around 25K with simpler structures, improved liquidity options, and standard tax reporting. The door is open.

Dan: Here's the bottom line. If you're serious about growing and protecting your wealth in today's complex world, you have to expand your toolkit. Private equity and alternatives aren't fringe assets anymore. They're powerful components to a modern portfolio. Smart investors are already moving. Are you?

Dan: If you want to learn how private investments can fit into your personal financial strategy and how to integrate them prudently without taking on unnecessary risks, reach out to us at Tailored Wealth. Our team specializes in helping business leaders broaden their portfolios, optimize for growth, and secure financial freedom. Visit yourtailoredwealth.com to learn more and to schedule an exploratory conversation. The future of investing is broader. Let's make sure your portfolio is...

• 60/40 portfolio: Classic mix of 60% stocks and 40% bonds for “balanced” investing.
• Illiquidity premium: The additional expected return that investors demand for committing capital to less liquid investments.
• Private equity: Ownership stakes in privately held companies, often accessed through funds.
• Private credit: Lending to private companies outside traditional public bond markets.
• Infrastructure & real assets: Tangible, often inflation-linked investments (e.g., toll roads, renewable energy, essential services).
• Dry powder: Unallocated, committed capital that private funds can deploy into new deals.

• Tailored Wealth – Work with Dan and the team

• Tailored Wealth

If you’re curious about whether alternatives and private equity belong in your plan, consider:

• Review your current allocation: How much of your portfolio is in traditional stocks and bonds vs. private or alternative assets?
• Clarify your goals & time horizon: Illiquid investments typically require a longer commitment.
• Discuss with an advisor: Ask how private equity, private credit, or infrastructure might fit into your broader strategy.
• Learn the basics: Read more on illiquidity premiums, fund structures, and risk/return profiles.
• Explore opportunities: If appropriate, review a few vetted private funds or vehicles that align with your risk tolerance and objectives.

The investment world is broader than ever. Thoughtfully incorporating private markets could help your portfolio better match the reality of today’s investing landscape.