Monday, December 2, 2013

What Are Private Placement Programs?

What Are Private Placement Programs?
Secondary Markets of capital or SM are a financial option, however, very little is known among investors but deserves being considered thanks to the level of guarantee derived from this investment.  

In the stock Primary Market (PM), the investor relies on the reliability and strength of a company to purchase shares. This trust can vary rapidly swooping from euphoria for the profits to the depression linked to the losses, as the stock market is not completely sure and safe.  
On the contrary, in the SM when someone deposits and invests his or her funds in a bank to be used in a certain program, the investor must know that this institution has stored enough cash or gold to assure his or her investment. For instance, any Swiss bank that has never had financial problems, can assure only profits not losses.     

In brief, the Primary Market is uncertain and backed by the companies while the Secondary Market is trustful and backed by the banks. 

In the Secondary Market only Bank Guarantees (BGs) are sold by the banks on a daily basis and several times a day, which allows for the bank at the end of the day to have enough profits for itself and for the clients.  

The BGs have their origin in a CD (Cash Deposit), in a SKR (Safe Keeping Receipt) or in a GCD (Gold Cash Deposit) owned by the investor.  

In other words, the BG is an official bank document that represents a fixed-term deposit with the difference that its profits are higher than the usual. At the same time, the banks issue a monthly briefing of these investments.  

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