Investing in Stock Market vs “Off Market” - By Chris Cushman

Jennifer Hester |

There are many different investments in the word, why do advisors talk about the stock and bond market instead of many other investments?

There are two main reasons:
1. Scalability – You can invest $100 or $100 million and it doesn't take long. Many other investments might require $10,000 – $1 million just for an initial investment.
2. Liquidity - You have the ability to invest in a day and usually liquidate in a few days. Many other investments can take weeks and months to liquidate.

To be fair, liquidity brings two major downsides.
1. Owning companies is a long-term investment. When people have the ability to sell, they don’t always allow their investments the proper time they need to grow.
2. Liquidity exists because people constantly bid on companies. Short-term price movements (volatility) happens because of the bidding system and this movement makes many people nervous day by day, month by month and quarter by quarter. If it was possible that your house had people on the sidewalk bidding for it day by day, you would see changes in the price and all the emotions that go with it!

If you want to have a discussion about the various types of investments give me a call!