Allen LomaxPrivate Investment Coach, Royal Legal Solutions · Capital Allocator | Empowering Professionals to Transition From Earned Income to Asset-Generated

Billionaires Invest DIFFERENTLY: Unlock Uncorrelated Assets!

9 Jul 2026 · 3 min

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3:03

In this segment, Speaker A critiques the common investor focus on headline return claims, describing them as mere spreadsheet exercises that rarely materialize. Speaker B asks why everyday investors cling to such strategies when billionaires apparently avoid them. Speaker A explains that public markets are highly correlated—citing data that value stocks correlate 97% with large‑cap growth and REITs correlate 75% with the broader market—making it impossible to achieve true diversification within public equities. He argues that the structural advantage for the ultra‑wealthy lies in allocating capital to private, uncorrelated alternatives such as oil, rental real estate, and other tangible assets that move independently of stock market swings. By placing assets into distinct “buckets” that zig when others zag, billionaires can reduce portfolio volatility and either boost returns or lower risk, a principle grounded in Modern Portfolio Theory. The speaker emphasizes that most individual investors miss this free‑lunch opportunity because they remain confined to the correlated public market ecosystem.

That's probably the biggest difference. I find individual investors are really focused on headlines, headline returns. Oh, they said it's gonna be 18%. Well, what people don't realize is that's simply a spreadsheet exercise. And it's simply, it's a promise. It's a claim, right? It doesn't mean anything typically. And so it's just a claim and it doesn't, you know, I don't know when a company has ever made exactly what their claims were, right? It's just a claim.
Yeah, well, for sure. And yeah, it just doesn't make sense to me why so many people hold to that strategy when the ultra-wealthy just don't do that. Well, in your book, you emphasize that billionaires win through structure, not just strategy. So what structural advantages do everyday investors often Right.
Great question, Alan. And, and so as I pointed out, so most people are in the public stock market, and the public stock market pretty much is correlated to everything else in the public stock market. So I, I have a chart in the book that shows that, you know, like value stocks are correlated to, to large-cap growth 97%. That even REITs, real estate investment trusts, which is apartment complexes and, you know, and cell towers, are correlated 75% to Amazon and the stock market. Well, explain that. That doesn't make any sense. Why is real estate correlated to stock market? Well, the issue is the structure of the public markets causes everything to correlate. And so the only way to, to, to get out of that is to be in private alternatives, which are uncorrelated. And so, so, you know, for example, stock market today, you know, drops you know, the Dow drops 1,000 points. Well, gold— I mean, sorry, but oil went up. So how many investors, how many private investors are listening to this are in oil? And, you know, how many people stopped driving today as a result of the stock market? Well, nobody, right? They're all driving. How many people stopped paying their rent today? Well, nobody. So own the gas pump. And so own the rental real estate, right? Those things are not correlated and they're not as volatile. So what billionaires do is they put their assets in different buckets. And these buckets, one bucket zigs when another bucket zags. That's the idea of true uncorrelated assets. And then what happens is your overall portfolio experiences far fewer losses, is what happens. And the math is there. It's called Modern Portfolio Theory. And it's basically a free lunch to get higher returns or lower risk, you pick. Mm-hmm. And very few investors are taking advantage of it. And if you're in the public market, markets. You simply can't because the public markets are highly correlated.