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Freakonomics Radio

654. Is the Public Ready for Private Equity?

Freakonomics Radio

Freakonomics Radio + Stitcher

Documentary, Society & Culture

4.632K Ratings

🗓️ 21 November 2025

⏱️ 63 minutes

🧾️ Download transcript

Summary

A Trump executive order is giving retail investors more access to private markets. Is that a golden opportunity — or fool’s gold?

Transcript

Click on a timestamp to play from that location

0:00.0

Let's say you find yourself with some money to invest.

0:07.5

Where do you want to put it?

0:08.9

Maybe you really like sports and you think you're good at picking winners.

0:13.0

So should you go heavy on sports betting?

0:15.5

Sports betting, zero sum.

0:17.7

And there are fees.

0:18.5

So your expected return is negative.

0:22.5

So you better get some fun out of sports betting or you shouldn't do it. All right. So that's probably not a good investing option.

0:28.1

Any other ideas? The worst are lotteries. The lottery your expected return is terrible.

0:34.4

How about investing in cryptocurrencies?

0:36.7

Crypto is very volatile. But if you're paying low fees or low transaction costs to trade,

0:44.0

it's a fair bet. Do you know if crypto's going to go up or down? I don't. Can you put some

0:49.6

of your portfolio in it? Probably some. So how about the tried and true method of buying some stock shares

0:56.2

of a big publicly traded firm? Or even better, maybe a low-cost index fund that includes a lot of

1:02.9

stocks? You buy a stock at competitive fees or an index fund in particular. It's a fair bet with a positive expected return.

1:14.0

That's awesome. Over time, that's how you build wealth.

1:18.8

There are now decades of research showing that low-cost index funds do offer good returns

1:23.8

at a relatively low risk. But what if I told you that there is an even better bet,

1:29.1

an investment category that has been outperforming stocks over the past 40 years? The problem is,

1:35.0

this investment wasn't available to retail customers. It was mostly for institutional and

1:40.0

ultra-wealthy investors. But that seems about to change. On August 7th, President Trump signed

1:46.3

an executive order called democratizing access to alternative assets for 401K investors. Those assets

...

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