The traditional 60/40 portfolio split (60% stocks and 40% bonds) has long been the standard asset allocation for long-term investing. For decades, this strategy has helped investors balance growth and stability, smooth out the impact of market volatility on their portfolio, and follow a logical decision-making framework for investing.
A well-constructed portfolio should continue to balance growth-oriented investments with those designed to provide income, liquidity, and downside protection. But markets and the way economic value is created have changed a lot in recent years, so it might be time to rethink that traditional split.
Ask yourself, if a significant share of economic growth occurs outside the public markets, does a public-only equity allocation still work?
While it’s not for everyone at every stage of their investment journey, strategically incorporating privately held businesses into your portfolio may offer broader growth exposure while managing volatility. The key, however, is doing so thoughtfully, without abandoning your disciplined portfolio construction or a long-term investment strategy.
The Privately Held Opportunity for Investors
By the time a company goes public, it has often already experienced years of substantial growth. While public stocks can still offer attractive returns for investors, waiting until businesses go public may mean missing out on some of the most dynamic phases of value creation.
Today, that opportunity set is far larger than many investors realize. Approximately 86% of companies with more than $250 million in revenue are privately held, meaning public stock markets represent only a subset of the real economy. In other words, a portfolio invested exclusively in public equities captures just a small fragment of American business activity. [1]
Another potential advantage of venturing outside the public markets? Private companies are diverse. They include family-owned enterprises, founder-led growth companies, highly specialized firms operating in niche industries, and more. From an investment standpoint, accessing that diversity can align well with the core principles of portfolio construction, spreading exposure across different business models and sectors. Relying solely on public markets, on the other hand, can limit access to these important segments of the economy.
Companies Are Staying Private for Longer
In 2000, the typical company went public after about six years. Today, that timeline has stretched to roughly 14 years. Over the same period, the number of publicly listed U.S. companies has declined by about 50%. [1]
For investors focused only on public equities, this can mean gaining exposure later in a company’s lifecycle, after early expansion, operational improvements, and strategic repositioning have already taken place. Private investments, by contrast, may provide access to earlier-stage growth and hands-on business development that public markets increasingly no longer reflect.
Hedging Public Market Volatility with Private Investments
What many individual investors don’t realize is that if you’re only invested in the public markets, you may be exposing your portfolio to concentration risk. Today’s major stock indexes are more heavily influenced by a small group of very large companies than in the past. The Magnificent 7, for example, include seven mega-cap stocks that are weighted heavily in major stock indices. If one company’s performance suffers, the entire index can lose value.
Private investments, however, have historically behaved differently. One reason is correlation, as private assets tend to move less in lockstep with public equity markets. To be clear, the lack of correlation doesn’t eliminate investment risk altogether, as private investments can certainly experience downturns. However, lower correlation can help smooth overall portfolio volatility over full market cycles.
Private Investing Is More Accessible for Everyday Investors
Historically, private investing was largely reserved for institutions and ultra-wealthy investors. The barriers to entry for individual investors included:
- High minimums
- Limited institutional-level access
- Long lockup periods
- Complex structures
In recent years, however, new fund structures, regulatory developments, and investment platforms have made private market exposure more accessible for qualified individuals. Minimum investment sizes have come down in some cases, and product design has evolved to better align with individual portfolio needs.
That said, “more accessible” does not mean they’re appropriate for everyone. Private investments still involve unique risks, including reduced liquidity and longer time horizons. Before putting your money towards something new, you’ll still need to conduct careful due diligence, think about the right asset allocation balance in your portfolio, and consider your long-term investing goals.
Remember to Maintain Your Portfolio’s Fundamentals
Private investments are best viewed as a complement to traditional assets, not a replacement for them. When incorporated thoughtfully, they can support your diversification objectives and expand growth opportunities without undermining the foundational principles that long-term investing depends on.
If you’re curious whether private investments may have a role in your portfolio, we’re here to help. Reach out and schedule a conversation with our team today to ensure your investment approach remains aligned with your long-term goals.
Sources:
- “Rethinking the 60%.” Blackstone. November 2025.
Sean Gerlin, CFP®, CPWA®, ChFC®, CLU®, is the Founder and Principal of Envision Wealth Planners, a fee-only financial advisory firm serving clients across Central Florida, including Orlando, Winter Park, Maitland, and nearby communities. In 2025, he was honored with the Wealthtender Voice of the Client Award, recognizing his commitment to exceptional client experience and long-term relationship-focused planning. Sean specializes in helping high-income families, business owners, and commercial real estate executives align their wealth with their values through a comprehensive Financial Life Planning approach. Learn more about EWP at envisionplanners.com.
This material has been edited with the assistance of artificial intelligence tools. The information presented is based on sources believed to be reliable and accurate at the time of publication. This material is for educational purposes only and does not necessarily reflect the views of the author, presenter, or affiliated organizations. It should not be construed as investment, tax, legal, or other professional advice. Always consult a qualified professional regarding your specific situation before making any decisions.