I marvel at how Wall Street creates wealth. This even happens sometimes through high risk investing. An investor purchases a few 100 shares in a small company that hits it’s stride or a start-up that goes supernova and they become a millionaire inside a decade.
That’s not normal. For most investors it takes multiple decades of steady, solid investing to create significant wealth. But it does happen from time to time, as we all have seen.
That’s why the latest opportunities or fads like cryptocurrency and NFTs attract us. It’s why we get caught up in new companies and try to buy in on the opening day of trading. IPOs (initial public offerings) tend to be extremely volatile. That is why investors are better off waiting for several months before they decide to purchase shares.
What if you could purchase shares in a company before it went public though? That would be an extreme level of high risk investing. You are essentially putting money into a company that might not even make it to market. That strategy is more like speculating than investing.
But would you do that given the opportunity? Put money on the line with a chance to hit it big or lose it all? I did once and here’s that story.