3c hapter - Index of

220 Locavesting
Game Plan for Locavestors
Local stock exchanges—like the kind that once dotted the land and
served their regional economies—are staging a cautious comeback.
They are seen by their proponents as an alternative to the frenzied
speculation of modern markets and a way to reinvigorate capital
investment in small, innovative fi rms and regional economies.
Pros:
Liquidity. Liquidity. Liquidity. Investors would be able to sell shares
if they needed to, rather than having to hold them indefi nitely,
making many types of local investments more attractive.
Regional exchanges could lead to a greater volume and diversity of
publicly traded companies and help offset the decline in listings at
major exchanges.
Investors would gain access to a diverse pool of qualifi ed companies
in their region to invest in.
Local exchanges would be free of casino- like speculation and highfrequency
trading—traders won’t be attracted to markets where
there is not a lot of action.
Communities can take back control and promote their own
economies.
Cons:
Any new exchanges will likely take some time to get established.
While the markets would provide liquidity, trading is likely to be light
and even intermittent.
Small companies of the type that may list on a local exchange may
carry more risk than large, well- capitalized ones.
The availability and quality of company research may not be the
same as for large caps that trade on the major exchanges.
The Bottom Line: A very compelling idea that could, if well executed,
provide a safe, alternative marketplace and important source of liquidity
for small, locally based companies and investors.
For More Information:
LanX - http://lancasterstockexchange.org/
Hawaii Stock Exchange - http://hilocalexchange.org/
Social Venture Exchange - http://socialventureexchange.org/
Mission Markets - Missionmarkets.com