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Private Market vs. Public Market Investing

March 30, 2021

Whether you’re jumping or dipping into the investing pool, it’s important to familiarize yourself with the terminology to ensure you fully understand where your hard-earned money is going and how it’s being invested. A good place to start is understanding the difference between private market and public market investments. We’ve outlined a few of the key differentiators between private market and public market investing below. 

Public Market Investing 

The main difference between these two markets is the liquidity of the investment. Public market investments are comprised of stocks and bonds. These are investments that the everyday investor is typically familiar with. They are publicly traded and for the general public and have high volatility and liquidity. 

Private Marketing Investing 

Private market investing is an investment strategy that’s been long used by the 1%. When markets are down, investing in private assets like real estate, commodities or collectibles may help reduce the highs and lows that occur in portfolios that rely heavily on the stock market. Balancing your portfolio with private market investments provides peace of mind when everyone is running around frantically talking about the dips of the S&P 500.

Putting all of your assets into the stock market is a high-risk approach to investing since the market is extremely volatile. You want to ensure you have a diversified portfolio with a mixture of both public and private investments so you can see the benefits when the market performs and also be shielded against market volatility. A well-balanced portfolio offers the best of both worlds and gives you a better chance at realizing long-term returns.

We outlined more information about public vs private investments in our infographic below:

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