Non-Marketable Security

A non-marketable security is a security that is not traded on an exchange. This can be due to a variety of reasons, such as the security being illiquid or the issuer being unwilling to make it available for trading.

Non-marketable securities can be issued by both private and public companies. Private companies often issue non-marketable securities because they are not required to register their securities with the Securities and Exchange Commission (SEC). This can save them time and money, but it also means that their securities are not as liquid as those of public companies.

Public companies may also issue non-marketable securities, such as preferred stock or bonds. These securities are often issued to institutional investors, such as pension funds or mutual funds. This is because institutional investors are more likely to be interested in non-marketable securities than individual investors.

There are a number of advantages to investing in non-marketable securities. One advantage is that they can offer higher yields than marketable securities. This is because they are less liquid, so investors are willing to pay more for them. Another advantage is that they can be more tax-efficient than marketable securities. This is because they are often issued at a discount to their face value, and the discount can be used to offset taxes.

However, there are also some disadvantages to investing in non-marketable securities. One disadvantage is that they are less liquid than marketable securities. This means that it can be difficult to sell them quickly if you need to. Another disadvantage is that they may be more risky than marketable securities. This is because they are not as well-regulated as marketable securities, and there is a greater risk of default.

Overall, non-marketable securities can be a good investment for investors who are looking for higher yields and tax-efficiency. However, it is important to be aware of the risks involved before investing in them.

Here are some additional details about non-marketable securities:

* They are often issued by private companies or public companies that are not required to register their securities with the SEC.
* They can be illiquid, which means that it can be difficult to sell them quickly if you need to.
* They may be more risky than marketable securities.
* They can offer higher yields than marketable securities.
* They can be more tax-efficient than marketable securities.

If you are considering investing in non-marketable securities, it is important to speak with a financial advisor to learn more about the risks and rewards involved.