This “invisible” market has just sent a powerful signal.
It didn’t come from the latest blip in broad market indexes, such as the S&P 500 or Nasdaq.
Most of their price movements are noise anyway…
But there’s a little corner of the market that’s just confirmed where we are in the 18.6-year real estate cycle.
The Venture Capital Winter Is Over
At this stage of the 18.6-year real estate cycle (I call this stage the “Eleventh Hour”), most assets appreciate.
From real estate itself to stocks, bonds, commodities… and, yes, private businesses.
And these small and private companies are a special bellwether of what’s to come.
They are risky; their shares are only available to accredited (read: very rich) investors or institutions.
And over the past two years, as global central banks went on to raise interest rates to multidecade highs, these small companies got destroyed.
Some of them were riddled with debt and couldn’t afford interest payments; others needed outside capital but couldn’t afford the terms either.
It was the “venture capital winter.”
But now it’s over.
Risky Assets Are in Vogue Again
The mainstream market narrative is that investors are scared. They parked their cash in savings accounts and liquid investments that, after a series of interest rate hikes, are finally able to generate a decent-looking yield.
But those yields are still not high enough to allow investors to forget about stocks and other high-risk, high-reward investments.
To double your money in an account yielding 5%, you need over 14 years.
But a stock can do that in less than a year…
And an early-stage company could deliver even larger returns.
The Financial Times reported that funds specializing in those venture capital companies have been raising billions of dollars after a multiyear drought in the mergers and acquisitions and initial public offering (or IPO) markets.
Lexington Partners, for example, tried to raise $15 billion for one of its private-market funds but the demand was so high it ended up raising $23 billion.
Investors are hungry for growth (again). They’re not content with whatever savings accounts and bonds pay…
And keep in mind that these private companies are future Apples, Alphabets, and Amazons.
They will power technology, medicine, and every other industry for decades to come.
And investors are craving these businesses again.
This is the narrative you should be paying attention to.
Risky assets are back, and you don’t want to miss out on this late-cycle rally.
It will be massive.
Editor, Cycles Trading with Phil Anderson
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