The stock market continues to adversely react to political tensions, by erasing a significant amount of value from all corners of the market without any distinction of industry, or company performance.
This isn’t the first time nor the last time that we see aggressive fluctuations that are tied more to fear, political posturing, and emotional reactions than to the actual value of individual stocks. To all you Game of Thrones fans out there [SPOILERS AHEAD], this is the equivalent of Daenerys completely destroying the city of King’s Landing with her dragon…which, I think we can all agree was a complete overreaction…what should we do? Diversify!
It has been a long-standing notion in the investing world that diversification and asset allocation are major contributors to long-term performance. Moreover, if we examine the top performers and true wealth creators we see that it is not enough to diversify just in stock and bonds (since they both reside in essentially the same public market – i.e., King’s Landing). It is prudent to have other asset classes in your portfolio, ones that are not correlated to public markets.
The catch? These asset classes, such as venture capital, private equity, and direct investment in companies, have an extremely high monetary threshold of entry – eliminating the ability for the majority of investors to access these and leaving them trapped in the path of the dragon. The solution? Democratize the investment world!
Here at CoPeace, through our different rounds of investing and our future direct public offering we provide a way for all investors, big or small, to diversify their investments by providing an extremely low threshold of entry to direct impact investing. This allows an access point for each investor’s capital to directly reach to companies that are doing good for the world in the private market and are not correlated to stock market fluctuations.
Hanan Levin is a Senior Investment Advisor at CoPeace. As a forward-thinking holding company, CoPeace is building a portfolio of carefully selected for-profit companies with measurable social and environmental impact. To learn more about impact investing, check out CoPeace’s Intro to Impact Investing.
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