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HOW TO JOIN WALL STREET’S MOST EXCLUSIVE CLUB. (SPOILER ALERT – YOU ARE ALREADY A MEMBER!)
The Wall Street Journal ran an article a couple of weeks ago entitled, Inside the Stock Market for the Wealthy (It’s Invitation Only). This article implied that there is an exclusive class of investments that only certain, ultrawealthy investors have access to. But in reality, there are parts of this market that anyone can join. And there are other parts of this market that many more people could join if they just knew how. If you are reading this post in our newsletter, the Intrinsic Value Wealth Report Newsletter, you are already an active member of this “exclusive Wall Street club.” And by reading this newsletter, you are learning how to become a more active member of this exclusive club because that is a large part of what the Intrinsic Value Wealth Report Newsletter is all about – helping people build wealth through these and other investments.
The Wall Street Journal article suggested that there has become a two-tiered market for investments. According to the article: “One tier is a private club of sorts, where a privileged group can obtain shares of companies still in their early growth stages. Everyone else is left with older, slower-growing names [i.e., public companies that anyone can buy].” At the Intrinsic Value Wealth Report Newsletter, we specialize in the market for early-stage growth companies and other alternative investments that make up the “exclusive club of Wall Street.”
In my view, there is actually a four-tiered market for investments. And everyone has access to at least some of the tiers, even the more “exclusive” ones. The four tiers are as follows:
• Crowdfunding Investments – Equity crowdfunding allows individuals to invest in early-stage companies or startups in exchange for equity (ownership shares) in the company. It provides an opportunity for both accredited and non-accredited investors to participate in funding businesses, especially those with high growth potential. Investors can participate through crowdfunding platforms like StartEngine, Republic, or Wefunder. In essence, pretty much anyone can invest in the crowdfunding market; but most people don’t even know that it exists.
• Alternative Investments – According to Investopedia, “Alternative investment is a catch-all term that encompasses all investments except stocks; bonds; or cash (or a mutual fund or ETF that holds one of those three). Examples include derivatives, hedge funds, commodities, and private equity, but there are many more.” Most alternative investments are only available to institutions and wealthy investors. But if you are in this category – which generally means you are an “accredited investor” (annual income of $200,000, or $300,000 together with a spouse; and/or a net worth exceeding $1 million, excluding the value of your primary residence) – there are many attractive investment choices in the alternative investment space. See this brochure, ADISA Guide to Alternative Investments, to learn more about alternative investments.
• Invite-Only Investments – The Wall Street Journal article stated that: “The ultrawealthy are able to buy and sell shares of the buzziest private companies via invite-only transactions long before they list their shares on public stock exchanges.” But if you are an active participant in the private markets, as we are at the Intrinsic Value Wealth Report Newsletter, you can sometimes get into these invite-only transactions. This is often done through the secondary market for private shares, as well as the general connections that we have in this invite-only market. For example, we are routinely shown shares in the most sought-after companies such as SpaceX (we were able to buy into SpaceX for ourselves and others a long time ago at a much lower valuations).
• Public Stock Market – The public stock market is a marketplace where shares of publicly traded companies are bought and sold by investors. It allows companies to raise capital by issuing stock to the public through initial public offerings (IPOs) and provides a platform for investors to trade those shares. The market is typically made up of various stock exchanges, such as the New York Stock Exchange (NYSE) and NASDAQ, where stocks of companies are listed and traded.
Conclusion
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