The Great Recession has apparently changed the way individual Americans view investing. Buying stocks is no longer seen as safe for long or short-term investment and trading is way down. Credit Suisse Trading Strategy reports that daily trading in American stocks continues to fall and is down almost 50% from the peak in 2008.
The lesson learned from the Great Recession is that Wall Street cannot be trusted. While the market might be reaching new highs, it is doing it without individual investors who, unlike high-speed traders, can feel that something is wrong.
You would think that with this stock market crisis the financial institutions would welcome regulations to inspire investor confidence. But instead of looking at Dodd-Frank—the financial reform passed to protect our economy from the practices that collapsed the market—as their vehicle to return to pre-Great Recession trading volume, Wall Street is doing everything it can to undercut and roll back the new rules.
And while the experienced Wall Street investors are walking away from trading, mom and pop small investors are looking for something else entirely. Fortunately, Congress has recently opened the door to a dramatically different type of equity investment. Investments that Americans know the country needs—investments in their own communities.
Soon all of us will be able to invest, not in some faceless symbol on our computer screen, but in a tangible business we can see, touch and even taste in some cases.
The new crowdfunding Security and Exchange Commission (SEC) rules will allow small, long-term investments in businesses not only in your community but in every community. It is this sense of community that will give regular Americans more investment confidence.
Last Friday the American Sustainable Business Council held a webinar on crowdfunding, “Crowdfunding is the law, now what?”
The webinar featured Andy Green, Legislative Counsel to Senator Jeff Merkley (OR) who was the prime sponsor of the crowdfunding provisions signed into law. Also participating was Jenny Kassan, who launched the equity crowdfunding effort in 2010 with a petition to the SEC, and Mary Rick, a crowdfunding consultant and former director of the crowdfunding portal The Hoop Fund.
Get up to speed on this exciting new small investment opportunity and vehicle for small businesses to have more access to capital. You can listen to the audio of the webinar here. Be patient in opening the link since it is a large file.