Written by Chadwick P. Markwell, Senior Opinion Columnist
There has been a lot of nervous chatter lately about private credit.
Rising non-accruals. Questionable valuations. Payment-in-kind interest. Loans made during the cheap-money era now looking slightly less magnificent under actual interest rates.
Relax.
Private credit remains fundamentally safer than public markets for one extremely important reason:
There is no little red number on your phone telling you to panic.
This is the breakthrough ordinary investors still fail to understand.
Public markets are dangerous because prices move constantly. A stock can fall 12% before lunch, forcing millions of people to confront the horrifying possibility that an asset they own is worth less than yesterday.
Private credit solves this problem elegantly by not asking anyone.
Your loan may be deteriorating. The borrower may be missing targets. Cash interest may have quietly become payment-in-kind. The company may be discussing “liquidity initiatives” with restructuring advisers.
But until somebody marks the loan down, none of that has technically happened to your portfolio.
This is called stability.
Critics complain that private assets can appear less volatile simply because they aren’t continuously traded.
Exactly.
If your house were repriced every eleven seconds by an anonymous hedge fund in Connecticut, you’d think housing was a terrifyingly volatile asset too.
The mistake is assuming price discovery reduces risk.
It doesn’t.
It reduces deniability.
If the S&P 500 falls 20%, everyone loses their minds.
If a private loan is probably worth 80 cents on the dollar but the manager continues carrying it at 97, sophisticated investors understand that the asset has merely entered a period of valuation patience.
This is why private markets are so calming.
No flashing ticker.
No screaming CNBC chyron.
No inconvenient stranger offering to buy your asset for 30% less than the number in your quarterly statement.
Just professionals, spreadsheets, and the soothing knowledge that everything is worth exactly what everyone involved has agreed not to question.
Frankly, we should apply this innovation to stocks.
Close the exchanges.
Mark the S&P 500 once every three months.
Allow JPMorgan to decide what Apple is worth based on “long-term fundamentals.”
Market crashes would disappear overnight.
You’re welcome.
Inspired by:
Reuters - "Unrealised losses at US private credit lenders deepen" (May 29, 2026)
