Top 5 Pros and Cons of Private Placements
With so many types of investment opportunities out there, it can be difficult to decide where you want to focus your investment portfolio. It’s always important to keep your portfolio diversified. But one of the riskier types of investment options is private placements.
These aren’t available to just any investor. But don’t let that go to your head. As advantageous as private placements can be, they are also just as risky. Continue reading to learn more about the top 5 pros and cons of private placements and when it’s time to call an investment loss lawyer.
Advantages of Private Placements
Private placement investments can be a great way for investors to maximize their returns. Your stockbroker may recommend private placements if the opportunity in question aligns with the goals outlined in your investment portfolio.
If you are considering investment in private placements, here are five advantages of private placements:
- Private placements do not need to be registered with the U.S. Securities and Exchange Commission (SEC)
- Investors can demand a higher interest rate
- Private placements are lightly regulated
- Young companies can remain private entities
- Private placements are only available to accredited investors.
Disadvantages of Private Placements
Despite the fact private placements can make investors a lot of money, they also carry considerable risk. Some of the disadvantages of private placements include:
- Since private placements aren’t registered, you’re at a higher risk of being scammed
- Investors get a higher interest rate, but no credit-rating from the issuer.
- Financial information is not regularly disclosed.
- Investors aren’t given a prospectus.
- Private placement offerings are often illiquid.
Get Help From an Investment Loss Attorney
When you invested in private placements, you surely didn’t expect to suffer massive losses. When these losses could have been avoided if your broker wasn’t negligent or defrauding you, you could get your money back.
Contact a reputable investment loss lawyer at Wolper Law Firm to discuss your potential arbitration complaint. Call our office at 800.931.8452 or complete our secured contact form to schedule your free consultation today.