With 215 initial public offerings delayed or canceled thus far in 2011, corporate fund raising on Wall Street is seen as problematical today.
Going public, holding an IPO, and raising operating capital by selling stock shares on Wall Street used to be a rite of passage for growing private companies with a bright future. These days, however, initial public offerings are seen as a dangerous play that could put a substantial portion of capital at risk of being hacked to pieces in the blink of an eye. The 215 withdrawn IPOs in 2011 exceeds the number that were pulled in the 2008 run up to the Lehman Brothers collapse. Only three years removed from what was essentially seen as a once-in-a-lifetime financial catastrophe, this encore performance has surprised experts that it happened at all, much less so quickly, and raises serious questions regarding the validity of the United States stock market as a reliable wealth creator in the current financial climate for businesses and individuals alike.
“This is not your grandfather’s stock market,” says Jason Hartman, investment expert and host of the podcast The Creating Wealth Show. “The world has intrinsically changed over the past fifty years. Why would anyone expect Wall Street to be immune?” From an investor’s perspective, it appears the change is not for the better, with the Dow Jones Industrial Average (DJIA) resembling an unhinged pendulum liable to drop hundreds of points one day, only to gain it back the next. Sharper price swings are the order of the day, and occurring more often, leaving individual investors and IPOs well aware they stand to lose a lot quickly with an unfortunately timed venture into what used to be a solidly profitable financial machine.
The month of August, 2011, took Wall Street participants on a wild ride of frequent four percent leaps and dives within the course of a single week, an instability which left many private companies deciding to hold off indefinitely on the IPO plan, and individual investors’ wandering where to turn for a chance at a decent return on their money? September isn’t looking much better.
Debt ceiling bickering. National credit downgrading. Ineffective leaders. Recycled economic policy. None of these do much to increase the public’s confidence in the stock market as an institution of wealth creation, so it’s no surprise to find investors’ looking elsewhere to take another run at living the American Dream. “Single family residential rentals are what we’re recommending to our listeners,” Hartman went on to say. “Despite the national media’s tendency to lump real estate into a single category and claim it’s weak right now, there are several local markets with strong buying opportunities.”
Hartman continued, “Under present economic policy, there is little chance Wall Street will regain its position as the investment of choice for the average American. There’s simply too much wrong with it.”
As founder of The Complete Solution for Real Estate Investors, and host of The Creating Wealth Show podcast, Jason Hartman advocates the belief that financial independence is available for everyone through the purchase of income property in prudent markets nationwide. Hartman provides embattled stock market investors with education, research, resources and technology to deal with all areas of their income property investment needs.
Flickr / Randy Le’Moine Photography
