The OTC Markets: Shelter from Stock Market Carnage

Most times, microcap stocks have been scoffed at by the bigger fish in the pond, but now plenty of money has been diverted into the OTC Markets. This past February, the OTC Markets witnessed a staggering 63% increase in shares traded; their most-active month in over a year. In the same period, a record $31 billion of equity was traded on the OTC Markets. With the current uncertainty in the stock market, that flow could soon become a deluge — a wonderful thing for my public clients.

While our attention has always been focused on the glitz of Wall Street, the OTC Markets quietly grew ‘exponentially’ between 1980 and 2000, due mostly to major tech advances and the committed stewardship of the OTC Markets Group. Over the years, the volatility of the ‘Big Boards’ [NYSE, Nasdaq, etc.] have essentially brought carnage to the larger group of investors. Yet still, roughly 10% of the population continues to receive 84% of the generated wealth from Wall Street. You better believe that this elite group will always be taken care of, but almost all other investors consistently find themselves scrambling for alternatives and safe havens.

Pivot!

The OTC Markets represent a seismic shift away from the traditional stock market because they offer unique opportunities for investors. Not only do the OTC Markets support entrepreneurs building startups or operating development stage companies, but it gives the average everyday person [the smaller investor] access to an aspect of the public markets that is typically within financial reach. Considering that small businesses account for 99.7% of all employers in the US, and the coronavirus has devastated many industries, this is possibly the most opportune time for the 99% to leverage the OTC Markets to help secure their financial futures, possibly positioning themselves for a strong rebound.

OTC is opportunity for you and me

This pandemic has thrust the looming recession upon us, and just like 2008 unfortunately, the 99% are feeling it the hardest. But at least in 2008, the 99% had a fighting chance. Now, considering “restaurants are the new factories,” and service workers have been ordered to stay home, this vital network of people are left without an income, and their bills haven’t stopped; leaving us to fear the worse. But as I’ve mentioned in the past, timing is everything, and with the SEC assisting people to find refuge in unfamiliar places, the OTC Markets may possibly find a place in the restoration of financial stability and growth for both entrepreneurs and smaller investors, for life after Covid-19.

The fact is, picking up the pieces from financial ruin is never easy, but knowing there are practical options geared towards the 99%, whether an entrepreneur or investor, keeps the American Dream alive. It certainly did for me!