HYPERGROWTH A COMPLEMENT TO EVERY PORTFOLIO
We believe that all portfolios benefit from having a portion of assets invested in Hypergrowth Stocks to build wealth over time. Hypergrowth Stocks offer high potential upside that can boost overall returns. Most Hypergrowth Stocks are not found in broad index products (such as the S&P 500, Nasdaq 100), so adding hypergrowth exposure can further diversify a portfolio with underrepresented growth stocks. That’s how you can get alpha and diversification in one shot.
Opportunity for High Returns
Conventional portfolios are oriented toward risk reduction as opposed to financial rewards. The National Institute on Retirement Security reports that a mere 7% of retirees can sustain their standard of living throughout retirement.* Investing in Hypergrowth Stocks can help to address this problem because they offer the opportunity for high potential upside. Hypergrowth Stocks can be more volatile than other stocks with lower growth rates—but time in the stock market can allow risk to dissipate and increases the opportunity for higher returns.
Enhance Your Portfolio by Adding 10% Hypergrowth Stocks 1
Annualized Returns Based on Golden Eagle Strategies Study from 2020-2024
A Complement to Every Portfolio
Because most Hypergrowth Stocks cannot be found in the S&P 500 and NASDAQ 100 Indexes, they can provide additional diversification within one’s equity portfolio. Further, Hypergrowth is agnostic to traditional categories like sectors and themes, so it can be overlayed on nearly any portfolio without skewing the existing allocation. And being agnostic to sector it can allow for additional diversification to one’s equity portfolio. For wealth advisors, adopting a hypergrowth investing approach involves managing a concentrated exposure to these companies as a distinct portfolio sleeve within a broader asset allocation framework.
Add Alpha & Maintain Your Investment Style 3
Volatility as Driver of Upside Gains
While hypergrowth stocks offer significantly greater return potential than traditional growth names, that reward often comes with higher volatility. Capturing these returns requires a long-term mindset—volatility is part of the journey, but historically, upside has far outweighed downside. The S&P 500 has delivered positive returns in 98% of rolling 10-year periods—and 100% when the holding period is extended by just six months. Despite multiple crises and five bear markets since 1985, the index has risen 25x, with total returns exceeding 58x when dividends are reinvested. The same long-term discipline that has paid off in the broader market could prove even more powerful in the hypergrowth segment.
Bear Markets are Temporary – The Bull Mark is Permanent 2
Annualized Returns from 2020-2024
KEYS TO SUCCESS IN HYPERGROWTH INVESTING
1 The framework discussed herein is hypothetical and does not represent the investment performance or the actual accounts of any investors. The results achieved in our simulations do not guarantee future investment results. The model performance information herein is based on the model performance of hypothetical investments over the time periods indicated. It is possible that the markets will perform better or worse than shown in the projections; that the actual results of an investor who invests in the manner these projections suggest will be better or worse than the projections; and that an investor may lose money by investing in the manner the projections suggest. Backtested performance is NOT an indicator of future actual results. These results reflect performance of a strategy not historically offered to investors and do NOT represent returns any investor actually attained. Backtested results are calculated by the retroactive application of a model constructed on the basis of historical data and based on assumptions integral to the model which may or may not be testable and are subject to losses. Hypergrowth Data is based upon internal research complied by Golden Eagle and is the latest available data. Returns are illustrative and not the result of a hypothetical investment model; they show the opportunity associated with investing in Hypergrowth Stocks. The Hypergrowth Stock return is taken by taking the Annual returns for each group have been constructed retrospectively to illustrate the price behavior during the fiscal period which corresponds to their sales growth rates. The universe of stocks uses comprises the S&P 500, plus the top 1000 Nasdaq stocks by market cap. We ignore companies with less than $100mm in revenue during the year of comparison. To harmonize data, we only included companies with December fiscal years; this covers 82% of companies and avoids performance period mismatch. S&P 500 Total Return Index is from Yahoo.com.
2 Data sourced from S&P (yahoo.com) and Golden Eagle Strategies research.
3 Based on Golden Eagle Strategies research.