Pros and Cons of Investing in Private Securities

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Published January 7, 2019

Published January 7, 2019

"Private placements are inappropriate for the average investor due to their extreme risk and the fact they can lock up an investor's money for multiple decades," says Joshua Escalante Troesh, owner of Purposeful Strategic Partners, an investment advisory, and business professor at El Camino College near Los Angeles.

"While private placements seem like sexy investments, for every story of one going well there are literally thousands of stories of companies no one has ever heard of where the investors lost 100 percent of their investment," Troesh says.

"Successful private placement investors will often invest millions of dollars across hundreds of companies to have a hope of finding one which becomes successful," Troesh says. "They also pay for their own due diligence by hiring accountants, lawyers, financial advisors, and other professionals to pour over the company's documents and plans before they invest."

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Joshua Escalante Troesh is the President of Purposeful Strategic Partners and a tenured professor of Business at El Camino College. To explore working with him on your personal financial planning and investment advising needs, simply schedule a free Discover Meeting.

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