Don't Fall For The Myth Of IPO Riches

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This week, Tracey went solo to talk about the “myth” of the IPO.

You know the story. It has a headline like, “If you bought Amazon stock at the IPO, you’d have $XYZ millions.”

Yes, there are some IPOs that have been fantastic. But it’s not the only way to be a good investor.

You can buy stocks well after the IPO and still see great performance.

What If You Bought 5 Years Ago?

Let’s say you missed out on buying Amazon (AMZN - Free Reportat its IPO in 1997.

If you bought it 5 years ago, the shares are up 374%. That’s outperforming both the Invesco QQQ Trust ETF (QQQ - Free Reportwhich is up 227% and the S&P 500 which is up 104.3%.

Or what about NVIDIA (NVDA - Free Report)? It’s up over 35% since its 1999 IPO. But in the last 5 years, it has gained 1,428%.

Other well-known companies, like fintech company PayPal (PYPL - Free Report), are up big over the last 5 years as well. PayPal has gained 646% during that time.

But even if you go outside of tech, rental equipment giant United Rentals (URI - Free Reportis up 370% over this time period. That’s similar to Amazon’s return.

Not Every Stock Will Be a Big Winner

But these are just a handful of stocks that have outperformed in the last 5 years. Other popular growth stocks haven’t.

Bookings Holdings (BKNG - Free Report), formerly known as Priceline, is up just 80% over the last 5 years, underperforming the major indexes.

Disclosure:Tracey owns shares of AMZN and BKNG in her personal portfolio. And no, she didn’t buy either one at the IPO.

Disclaimer: Tracey Ryniec is the Value Stock Strategist for ...

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