Question:
I know nothing about stocks, so use simple terms. But an up and coming company that I'm a customer of has asked me if I want to buy 100 to 5,000 shares. I'm struggling financially but I really believe in this company. Should I invest? Can I re-sell my stocks that day? Will it be hard to contact someone with the "limited purpose brokerage account" I'll be set up with? I'm thinking once they open everybody is going to go nuts and buy their stock. Does that happen? I don't know how this process works at all. Thank you for your thoughtful advice.
Answer:
The bottom line answer has nothing to do with a stock being an IPO or not. The main answer would be to follow the basic rules of investing;
Only buy what you understand.
Never (ever) take "tips", from friends, relatives, TV, Radio Etc.
Follow your own asset allocation based on your risk tolerance and time horizon.
Don't be a pig. In the stock market pigs get slaughtered.
Grow rich slowly, or lose your money quickly. Your choice.
ipos often show a burst of activity on the first day and week of trading on the open market. that being said, never buy stocks with money that you cannot afford to lose
If you are struggling finacially you should not invest in the stock market.
I suggest you to get a second job, sell your car and pay your debts.
Once you are "out of the woods" then you can start investing half your paycheck in the stock market.
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