Some people reach out and their first question is:

“What kind of returns can you get me?”

I always have to start by explaining that investing is inherently uncertain.

What we can do is build a portfolio that we expect to have a higher long-term return profile, maybe something in the 12–15% range.

But to pursue that, you need to be willing to accept some serious risk:

• equity risk

• illiquidity

• leverage

• volatility

• and painful drawdowns at times

Scary stuff.

(almost) Nobody actually wants that.

What most people really want is:

high returns with low volatility and no drawdowns.

And I’d also like a Porsche 911 for the price of a Prius…

Leverage is a tool.

Private equity is a tool.

Real estate is a tool.

Hedge funds are tools.

You want the mix of tools that are the best fit for you right now. And the optimal mix of tools are likely to change throughout your life.

So, if you’re in the $10M+ range and the opening question is still:

“What returns can you get me?”

…you’re probably asking the wrong question.

The better questions are:

• What risks am I actually taking?

• What role does this play in my life?

• How tax efficient is the portfolio?

• What happens in a bad environment?

• How much complexity/liquidity risk am I comfortable with?

• What return is actually necessary for my goals?

That’s the real work of portfolio construction.