Topic: How To Invest

What is Pat’s commentary for the week of April 2, 2019

Article Excerpt

The rising stock market and improving economy in the U.S. over the past couple of years have spurred investor demand for new stock issues (also known as IPOs, short for initial public offerings). If this tempts you, it pays to keep in mind that new share issues only come to market when it’s a good time for insiders or the company to sell. That isn’t necessarily a good time for you to buy. That’s especially so in a time of high demand for new issues, like today. Underwriters like to set a price on new stock issues that takes advantage of rising public demand—they want to “charge what the traffic will bear,” as the saying goes. It can mean that prices rise from an already inflated level, with no corresponding rise in value. When investor interest in new issues is rising, “hot new issues” become more common. That’s what happens when a new issue attracts a lot of interest and it begins…

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