Even if you don’t play the stock market, Wall Street’s recent rollercoaster ride may have you worrying about your nest egg.
But before you decide the end is near, keep in mind that the number of publicly traded companies amounts to less than one tenth of one percent of all the businesses operating in the United States. Smart investors are finding plenty of opportunity and profit in the nearly 24 million private companies that impact the everyday lives of most Americans through employment and products.
“It’s these 24 million who are largely responsible for fueling our nation’s economic expansion and growth,” says finance expert Stephen H. Watkins, chief executive officer of Entrex. “These firms range from micro to local and expanding regional or national businesses.”
And despite the dire dips and drama of Wall Street in recent months, news from the private sector is surprisingly good, Watkins says. He should know; Watkins’ company, Entrex, maintains an index that tracks the performance of private companies across the country. In 2006, the Entrex Private Company Index (PCI) reflected a 52 percent growth in performance, and as recently as July of this year was indicating a healthy view of the economy.
Working on the belief that “capital can’t fund what it can’t find,” Watkins founded the PCI two years ago to track revenue growth in the private sector. Each month, a diverse range of private companies contribute data, allowing the index to track trends in the purchase of goods and services from Main Street, U.S.A. Until the creation of the PCI, there was no standard for benchmarking the performance of private companies seeking investors.
This hybrid measuring stick provides traditional Wall Street professionals and investors with a clear indicator of how they can benchmark performance from a diverse group of privately held American companies. The companies who voluntarily participate in the index gain a profile with investors they might otherwise be unable to reach, freeing them from dependence on bank debt and unregulated equity arrangements.
“With the world’s focus on public companies – in the form of stock value and dividends – it’s easy to forget that capital markets are not the bedrock of our economy that the financial industry and media lead us to believe,” Watkins says.
“Hardworking, successful and private companies, who are not ready for the public markets, have had no venue to offer interested and knowledgeable capital sources an opportunity to invest,” he says. “Yet, it is investments into these companies which provide true economic gain regionally – versus simply the trading gains we see on Wall Street.”
To learn more about the Entrex Private Company Index, visit www.Entrex.net or www.PrivateCompanyIndex.com.
Courtesy of ARAcontent