The value of private investing

When you hear the term private investing, it might conjure up various images, especially to unprofessional investors. However, private investing isn’t necessarily about doing it in private. Rather, private investing simply means investing in something that isn’t available to be traded publicly, particularly on a public stock exchange.

Public versus private investing

As a result, there are various consequences to engaging in private investing, versus public trading. On the one hand, although publicly-available investments are generally more accessible to the public — as an example, anyone can open a discount-broker account and start trading today — public trading also means that more regulations are attached, such as the prospectus requirement, which has those offering publicly-traded investments provide all kinds of information not required for private investments.

Private and alternative investments

Of course, there are always two sides of a coin — or an argument, so to speak. So, while federal regulators will argue that the prospectus requirement ensures investors get all the information they need before investing, it can also limit the kinds of investments being offered, especially to those seeking alternatives.

The evolution of private investing

There is also something else to keep in mind when it comes to the market for private investments. This isn’t 1970. Private investments have evolved over the years, to the point where even the regulators have had to adapt. As a result, the private investments market is generally more open than it was before.

Specifically, private investments used to be available to what’s known as an accredited investor, which is a term that generally applies to high-net worth individuals and investors. However, today, that’s not the case, as various exceptions have been made to allow for smaller investors. And this, by the way, not only benefits accredited investors, but also companies seeking to raise capital in the private markets. The more open the market is, the more opportunities that are available for everyone.

ASCEND GRP is an asset-management firm, with offices in Toronto, Richmond Hill, and New York, that services clients seeking investment opportunities worldwide.

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