{"id":13498,"date":"2024-10-30T15:01:17","date_gmt":"2024-10-30T15:01:17","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13498"},"modified":"2024-10-30T15:01:18","modified_gmt":"2024-10-30T15:01:18","slug":"proposed-test-to-gain-access-to-private-investments","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/proposed-test-to-gain-access-to-private-investments\/","title":{"rendered":"Proposed “Test” to Gain Access to Private Investments"},"content":{"rendered":"\n

William M. from Los Angeles, CA asks: <\/em>Hello Mitch, I recently learned about a \u201ctest\u201d being floated to give more individual investors access to private market investments. Are you familiar with this test, and what\u2019s your general view on diversifying further into private markets? Thank you.<\/p>\n\n\n\n

Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n

Thank you for writing, William.<\/p>\n\n\n\n

First, for readers who may not be familiar, investing in private markets refers to non-traditional assets that are not listed on exchanges\u2014such as investments in private equity, venture capital, real estate, private debt, and so on. Back in the early 1980s, regulators decided that these investments should only be made available to \u201caccredited investors\u201d or financial institutions, which for individuals meant having at least $1 million in net assets (not including primary residence) or at least $200,000 in annual income for single filers and $300,000 for joint filers.1<\/sup><\/p>\n\n\n\n

These income and net worth levels were largely arbitrary at the time, meaning that less than 2% of households could access private market investments. Today, given 40 years of inflation and rising incomes and markets, a little under 20% of U.S. households qualify.<\/p>\n\n\n\n

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