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The Investor's Advocate: IPO "Doh!"

 


Revealing Mistakes Investors Often Make with IPO's


Think that IPO's are the "sure bet" investment that many make them out to be? Think again! So says Anthony Rhodes, the owner of wealth management firm The Planning Perspective ( www.theplanningperspective.com) in a new post called "Offering Overload" (https://www.howtoinvestblog.net/2020/12/offering-overload.html). This is a recent addition to his popular How To Invest blog (www.howtoinvestblog.net).

"It's hard for investors not to get excited about IPO's." (Initial Public Offerings) he began. "They provide an opportunity to potentially own high performing stocks from their very first day of issuance." he continued. "Imagine if you could go back in time and purchase future giants like Netflix, Google or Amazon as soon as they became available to the public." he added. "This is the potential that the IPO market represents." 

The problem, according to Mr. Rhodes, surrounds the hysteria to purchase these future bellwethers, and the sometimes blinding consequences that result in their attempts.

"Not all IPO's become Netflixes, Googles or Amazons." he stated. "In most cases, these names are the exception, rather than the rule. But once a particular sector gains interest, investors tend to develop a belief system that borders upon irrationality, and forget this simple truth." he added. "My hope is that the post will provide them with a bit of cold water to bring them out of this illusory state, so that they can make more sound decisions regarding their selections." he closed.

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