I Manage $2.7 Billion. Here’s What Drives Investment Success

Most entrepreneurs aren’t wired for comfort. They act without perfect information and bet on themselves long before the odds look good. In business, that mindset is often rewarded. In investing, it often leads people in the wrong direction.

After a liquidity event, many founders approach investing the same way they approached growth. The focus shifts to new ideas and new strategies. Far less attention is paid to the decision that quietly drives everything else.

Asset allocation is the foundation

Research has pointed to the same conclusion for decades. Long-term results are driven far more by portfolio structure than by stock selection or market timing. The data hasn’t shifted much. Asset allocation still explains most long-term results, often more than 90%.

For entrepreneurs, that can feel anticlimactic. Big wins usually come from bold calls. Investing doesn’t work that way. Investing works differently. Outcomes tend to follow structure, not prediction.

The goal is not to find the next moonshot. It is to build a portfolio that compounds steadily, holds up in downturns and supports your life without constant intervention.

When diversification becomes a problem

Diversification is often presented as an unquestioned good. In practice, it is frequently taken too far. Many portfolios today include a long list of asset classes, each added in the name of reducing risk.

The result is often the opposite. This is because complexity increases, fees accumulate and investors lose clarity around what is actually driving performance. When markets become volatile, complexity encourages reaction. Positions are added because they recently worked and reduced because they recently disappointed.

Over time, behavior becomes a bigger drag on returns than market conditions themselves. Portfolios that are difficult to understand are difficult to stick with, especially during periods of stress.

Asking the question most investors ignore

When people think about asset allocation, the conversation usually starts with what to include. Should you own gold? Should you invest internationally? Should alternatives play a role?

Those are reasonable questions. But an equally important one is almost never asked: What should you not own?

Every additional investment adds friction. It adds cost, correlation risk and emotional complexity. If an asset does not meaningfully improve outcomes after taxes, fees and behavior are considered, it may not belong in the portfolio at all.

Wealth preservation and growth do not require constant innovation. They require selectivity and restraint.

Price discipline still matters

Asset allocation sets the framework, but the price you pay determines how forgiving the outcome will be. All asset classes move in cycles. Optimism drives prices higher than fundamentals justify. Fear pushes them lower than logic suggests.

Entrepreneurs understand cycles in business but ignore them when investing. Chasing performance near peaks and hesitating during downturns is a common and costly pattern, and buying at reasonable prices does not require predicting the future. It requires patience and discipline.

This is often where investors benefit from professional guidance, not because advisors know what will happen next, but because they help enforce discipline when emotions are loudest.

Costs quietly compound

Entrepreneurs are typically meticulous about expenses inside their companies. They watch margins closely and question recurring costs. That same discipline does not always extend to investment portfolios.

Management fees, transaction costs and taxes may seem manageable individually. Over time, they compound into a meaningful drag on results. Portfolios designed without regard for cost often struggle to support long-term spending needs, especially during periods of lower returns.

Being cost-conscious is not about minimizing fees at all costs. It is about ensuring that every cost serves a purpose and improves the overall outcome.

The portfolio you can live with

Even the best-designed portfolio will experience volatility. No allocation eliminates uncertainty without also eliminating growth. The most successful portfolios are not the ones with the highest theoretical returns. They are the ones investors can stick with through market cycles.

This is where risk tolerance becomes personal. Entrepreneurs already carry concentrated risk through their businesses. Their investment portfolios should acknowledge that reality rather than compound it.

Staying invested during periods of stress is not a test of intelligence. It is a test of temperament.

Why simplicity wins

The longer I work with entrepreneurs, the more convinced I am that simplicity is an advantage. Clear structure creates clarity. Clarity builds confidence. Confidence makes it easier to stay disciplined when markets test your resolve.

These principles are not new. They are not complicated. And they do not depend on predicting the next trend. They depend on restraint and patience.

Leonardo da Vinci once said that simplicity is the ultimate sophistication. In investing, that idea holds up remarkably well. Long-term success does not come from doing more. It comes from doing fewer things well and giving them time to work.

Most entrepreneurs aren’t wired for comfort. They act without perfect information and bet on themselves long before the odds look good. In business, that mindset is often rewarded. In investing, it often leads people in the wrong direction.

After a liquidity event, many founders approach investing the same way they approached growth. The focus shifts to new ideas and new strategies. Far less attention is paid to the decision that quietly drives everything else.