Private equity vs public market investing?

how does private investing compare with public market investing? what are the similarities and differences between the two?

Good question. For most individuals, private equity investing is not a good idea. First of all, it generally means committing huge sums of money (usually millions), so unless you know one of the founders of the business and can get in for a few thousand dollars, it's generally out of reach for most people.

Another reason to stay away from private investing is that it is not as well regulated as public investing, meaning there are fewer protections for investors.

Finally, private investments are much less liquid than public investments. When you own (public) stocks, you know exactly what they're worth at all times, and if you need to, you can sell them at a moment's notice. With a private investment, the selling price must be negotiated, and can take months (or years) to sell.

Generally, private companies are owned by (a) the founders, and/or (b) investment companies who may or may not take a "hands-on" approach to managing the business.

I hope that helps.

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