How To Easily Cash In On The Best IPOs

Not long ago, the best shares of the market's hottest initial public offerings were reserved for elite investors, but with the advent of entities like special purpose acquisition companies (SPACs) and methods like direct listings, which we saw last week with Coinbase Global Inc. (Nasdaq: COIN), that's changed.

The landscape has changed so radically, with a near-constant flow of high-profile IPOs, that the central question – "What IPOs should I invest in?" – has flipped upside down.

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In 2021, the more important question is: "What IPOs shouldn't I invest in?"

DoorDash Inc. (Nasdaq: DASH) is the perfect example of an instance where eager investors should've thought twice…

On Dec. 9, 2020, it raised $3.4 billion, trading at a 9.5% premium to its opening price.

Then the roller coaster ride started… a three-week 26% drop, followed by a nine-day 43.5% rise, with investors chasing the stock all the while. By March 2020, DASH shares had fallen 39.5%; retail investors who managed to get the stock at IPO notched a particularly bruising 20% loss.

The thing is, a recovering economy and the constant growth of the tech sector mean 2021 is going to be another record-breaking year for new stocks.

In 2020, there were 480 total IPOs, but barely five months into 2021, we've already seen 429 hit public markets – that's nearly 10 times more than we saw over the same stretch of 2020.

To be blunt, plenty of these IPOs won't be worth it; their shares could ultimately trade for pennies.

But it's also true that the next Amazon or Microsoft is out there, and may be listing this year – and I know an easy way to make sure you own it…

Leave the IPO "Minefield" Behind

I've had thousands of interactions with investors from all over the spectrum – young and old, folks just getting into the markets, old pros, with modest capital and vast piles of it. The IPO strategy I share with them, and indeed with you all, has always been simple: wait.

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