The investor’s strongest tool
By Anish Dhanjee, Senior Project Manager, AVANA Companies
Consumers have endless choices in their everyday lives and investing options shouldn’t be any different. Having choice as a consumer is at the heart of every industry, and our economy at large.
Take buying a mattress, for example. Twenty years ago, you had a handful of brands to buy from all offering more or less the same options. You’d walk into a department store or strip mall mattress dealer and have a salesperson bombard you with the sales pitch of the week – pushing you to buy the most expensive mattress they can, not the mattress you really want or need.
Over recent years through an increase in the availability of information, healthy competition, and the use of technology to enable a direct-to-consumer marketplace, the mattress industry has been dramatically reshaped. Consumers have the power, rather than the dealers. Consumers can buy a mattress online, sleep on it for 30 days, and even return it if it does not meet expectations. We now have a choice.
Likewise, the finance industry has modernized and adapted to meet consumer needs. Historically, investors have had limited options when it comes to where they can invest their capital. Moreover, alternative investment options have, essentially, been unavailable to retail investors. However now, the decision of ‘how’ and ‘where’ to deploy capital is at the very core of investing. This is especially true as investing options continue to grow for the individual investor through better availability of information, competition, and the introduction of technology-driven platforms.
Throughout this article, we will discuss a lesser-known, reliable, alternative investing option that provides investors with an additional choice: private credit investing.
Enhancing current portfolios
Traditional investment opportunities such as stocks, bonds, and CDs have proven to be volatile in recent years. Why? The economy is evolving constantly, leaving space for more predictable investment strategies, strategies that fill in the gaps within investment portfolios.
Allowing retail investors the opportunity to expand their portfolios through an often overlooked option – private credit investing – has the potential to shape and influence portfolios for decades to come. With platforms like EqualSeat, this type of investment opportunity has become far more accessible to retail investors.
Investing can be a personal experience. The ability to choose which projects, companies, or regions one wants to support financially is powerful and personal! As we looked at the evolving landscape of investing, we recognized just how limited this ability to choose was, especially in the private credit investing space, and so we set out to develop a platform that fills that gap in the market.
What is private credit investing?
Historically, private credit investing was typically reserved for banks, institutions, and the ultra-wealthy, and as such, has flown under the radar of individual investors. Private credit investing can give accredited investors access to fractional investments in commercial debt, providing a reliable, predictable, and transparent alternative investment opportunity without the volatility offered by equity investments. Interest on commercial loans is paid monthly, and then passed on to investors accordingly, resulting in a reliable and predictable income stream.
Today, through different investment platforms, individual investors can co-invest alongside institutional investors in fully funded, high-quality debt investments that support small business owners, clean energy, and other commercial projects. In addition to steady cash flow and reliable returns, investors have full control over where they decide to invest their money while generating passive income from day one.
Why Choices Matter
Aligning investments with your values is the ultimate expression of choice. As investors, you now have the ability to invest in what truly matters to you thanks to the ever-changing landscape driven by technology. Investing in debt and funding projects that matter to you is where the true power of private credit investing operates.
Private credit investing exists and it’s here to stay. Investing in debt is the latest tried-and-true form of investing with the potential to level out countless portfolios. As the stock market continues to be volatile, private credit investing (in commercial debt) can give you something to look forward to each month due to transparent return estimations. Having the choice to invest in stocks, bonds, and CDs is all a part of your individual investing experience. Due to increased access to private credit investments, you now have the opportunity to also access reliable long-term returns.