Buying New Issues

Has your broker been calling you recently with the "great opportunity" to get in on a new Initial Public Offering? With friends like that you don't need any enemies.

I don't care how good this new stock offering sounds. The chances it will stay even or go up are about 1 in 3 and I don't want to play those odds with my money.

Most of the new IPOs these days are from the technology sector. That is where the romance and big money has been, but the NASDAQ topped out on March 10 this year. It is a good idea to take a look at what has happened to these new offerings since that time.

The S&P500 Index has dropped only 3% since March 10 while the NASDAQ Composite has fallen 43%. Here are a couple of numbers you will want to remember for the rest of your life if you have any interest in the stock market. Sixty percent of the move in any stock is due to the category or sector it is in. Twenty percent of a stock price is due to the overall market movement and 20% is caused by the quality of the company itself. You can immediately recognize that even if you have bought the best stock it has only a 1 in 5 chance of going up if the other 2 factors are not working for you. Since March 10 the New Issues Index is down 67%.

With all the major market indexes in the sewer there is little hope for ever finding one of those new issues that comes out at $10 and runs up to $200. Those days are gone forever - at least in the technology field. The NASDAQ has a better chance of going to 1500 before it ever goes back to 5000.

For the next year, maybe longer, we are going to see the number of new issues dry up and almost disappear. And there are many other good reasons other than the overall market. In a new issue you have no idea how the company will perform. Will management make its projected goals? Is there any possibility of a profit? You have no track record for their price performance. Will the stock price trend up or down? The more of these unknowns you throw into the mix the less chance there is that the stock will go up.

Last year we had a raging bull charging through fences and tearing everything up and we all loved it. All we had to do was follow the bull. The bear has taken his place and is ruining the landscape. And you know what bears do in the woods. Be careful where you step - or put your money.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

[email protected]; 1-888-345-7870

In The News:

Why you should invest in multi cap mutual funds  Economic TimesMany advisors are recommending multi cap funds in the current environment to investors. This scheme which bundles large-, mid- and small cap stocks is often ...
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Mutual fund investors keep faith in stocks despite market rout  LivemintMumbai: Investors in Indian equity mutual funds bought more last month, unfazed by the selloff that saw the nation's $1.9 trillion market log its worst July in 17 ...
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Fund managers bet over Rs 8.5K crore on these 6 stocks in July; do you own any?  MoneycontrolFund managers added large-cap private banks, utilities, energy and select FMCG names.
Motilal Oswal NFOs may suit investors keen on passive mutual funds  Economic TimesFour index funds tracking Nifty 500, Bank Nifty, Nifty Midcap 150 and Nifty Smallcap 250 are currently open for investments.
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Hot and Cold Stocks of Mutual Funds in July 2019  MoneylifeIn July 2019, IndusInd Bank and ICICI Bank were the most preferred stocks of Indian mutual funds.
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MFs, FIIs bought these 16 stocks consistently in last 1yr; what should you do?  MoneycontrolThe market has tanked since the budget on July 5. Investors have lost about Rs 12 lakh crore in terms of market capitalisation on the BSE since then. The freefall ...
Stocks in the news: Igarashi Motors, Glenmark Pharma, Alkem Labs, Lupin and Future Retail  Economic TimesFidelity Investment Trust offloaded over 1.91 crore shares of LIC Housing worth nearly Rs 821 crore.
Value mutual funds have given good returns over long term but can underperform in short term  Economic TimesOver the years, the benefits of value investing have been espoused by several market gurus and fund managers. Discussions around this investing philosophy ...
Tech Stocks Help This T. Rowe Price Mutual Fund Excel  Investor's Business DailyT. Rowe Price mutual fund manager Josh Spencer has tough shoes to fill. Tech stocks, especially software stocks, help him reach his goal.
Low hanging fruits? Stocks top money managers bought all through jittery July  Economic TimesAsset under management of the mutual fund industry inched higher to Rs 24.53 lakh crore in July despite a harsh selloff in the domestic equity market, data from ...
Step up your SIPs in these mutual funds to benefit from the market correction  LivemintAn SIP will automatically accumulate more units in corrections such as the present one.If you wish to cautiously take advantage of the market correction, stick to ...
Equity mutual funds are offering negative returns. What should investors do?  Economic TimesAll equity mutual fund categories have been offering negative average returns in the last one year. Small cap and mid cap schemes were hit the most, with ...
Avoid these 5 investing mistakes in a down market  MoneycontrolMistakes are plentiful during a market downtrend. Avoid these common ones, and you will be able to keep your hard-earned cash intact.
Mutual Fund Update: Stocks that attracted fund managers in July 2019  Dalal Street Investment JournalIf we look at the June 2019 data, we find that the financial sector was the one that was on top of the buying done by the fund managers. Even in the month of July ...
Equity mutual fund managers buy the dip amid a huge downturn in market  Business StandardDomestic money managers lapped up shares of several companies amid a huge downturn in the market last month. Equity mutual funds (MFs) bought shares ...
Mutual fund investors showing great appetite for assuming risk: Dhirendra Kumar  Economic TimesOne would have thought that new investors who came into mutual funds will be running away. But they are getting into riskier category of funds and the scale of ...
Mutual Funds: To stay invested or exit? Check these four points first  The Financial ExpressThe BSE Sensex is trading lower compared to the 1-year-ago and 3-months-ago levels, while it is flat compared to its level 6 months ago. In the past one year, ...
What 401(k) Investment Rules Are You Following To Get You Through Retirement  ForbesWhile you may have excepted your employer's default 401(k) investment, is it right for you? Are there alternative choices that are better for you?
Sebi wants MFs to invest only in listed securities  Economic TimesSebi said it has also decided to give flexibility to MFs to invest in unlisted NCDs up to a maximum of 10% of the debt portfolio of the scheme.
Goldman Sachs Finds 5 Top Stocks Mutual Funds Have Loaded Up On  24/7 Wall St.These top stocks should come as no surprise as they make sense, being huge, dominating much of their specific business lines, being very liquid and looking to ...
Charticle: Top stocks that FPIs, MFs bought and sold during June quarter  Business StandardEquity markets witnessed some sharp upmove in the first half of the calendar year 2019 (CY19), first on the anticipation of the return of the Narendra Modi-led ...
India is still a stock picker’s market, but investment horizon should be 5 years  MoneycontrolIndia is still a stock picker's market and there is scope for active management, and for fund managers to deliver alpha over the long term. says Sampath Reddy.
Mimicking a fund manager’s portfolio is like chasing a rainbow  MoneycontrolWe would all be millionaires had the task been that easy. In reality, things could go horribly wrong by simply cloning fund managers.
DSP Mutual Fund takes 50% haircut; CCD group firms ask for 2 weeks  Business StandardRead more about DSP Mutual Fund takes 50% haircut; CCD group firms ask for 2 weeks on Business Standard. The haircut led to a 1.3 per cent hit on the net ...
Mutual Fund Trend: Infosys, REC and UPL among most sold stocks by MFs in July  Zee BusinessMutual Fund Report: Domestic equity mutual fund inflows continue to show resilience despite market volatility, with July inflows touching Rs 73 billion – a 9M ...
How to recession-proof your life  CNBCWith all the rumblings about a possible recession on the horizon, it pays to be prepared.
Investors Are Usually Wrong. I’m One of Them.  The New York TimesForget about getting everything right. Most people are so consistently wrong that merely avoiding major errors is enough to set you apart from the pack. That is ...
ITI Mutual Fund mulls slew of scheme launches in next few months  MoneycontrolThe fund house which began its operations with the launch of ITI Liquid Fund and ITI Multicap Fund in April 2019 and ITI Long Term Equity Fund in July 2019 is ...
3 Funds to Benefit From Robust Home Sales  NasdaqPer the lates t report from the National Association of Realtors, existing home sales in the month of July increased more than estimated. The metric.
Loss Aversion Bias: Why are we reluctant to sell a losing stock or mutual fund?  The Financial ExpressBeing averse to losses is not necessarily always bad, but too much of it can skew your financial planning.
The Mutual Fund Show: Crisil's Ranking Of The Best Schemes After June Quarter  BloombergQuintMutual fund houses managed more money in the quarter ended June as investors turned upbeat after Prime Minister Narendra Modi returned to power with an ...
Explained: What is mutual fund NFO?  LivemintIn an NFO, you can subscribe to the units of the new fund, which is being launched, at an offer price which is usually set as ₹10.After the NFO, an open-ended ...
8 of the Best Investments During an Economic Slowdown | Portfolio Management  U.S News & World Report MoneyThe stock market is jittery over worries about an economic slowdown, and August's inverted yield curve added to those concerns. The stock market's bull run is at ...
Fund of Funds is a better fit for DIY investors  MoneycontrolThe budget had nothing much for mutual funds to talk about. But there is one provision that is likely to bring some cheer to a certain category of mutual ...
Q1 impact: Brokerages upgrade these 10 stocks, expect double digit returns  MoneycontrolThunuguntla said stocks in non-banking sectors have been languishing that reflects the impact of a slow economy.
The Best Investments You Can Make Right Now  NerdWalletBased on your timeline and risk tolerance, the best investments to make right now are high-yield cash management accounts, money market funds, CDs, bonds, ...
3 smart ways to deal with stock market turmoil  The Financial ExpressInvestors and spectators often go through an emotional roller-coaster every time the stock market goes up and down. So, what should they do when such phases ...
Stocks in the news: ITC, RIL, Nestle, NIIT, Coffee Day, DHFL, Union Bank, Bata India, JK Cement  MoneycontrolNestle India | NIIT | Coffee Day Enterprises | DHFL | Union Bank | Bata India and JK Cement are stocks which are in the news today.
Global markets panic as US Fed hints at no more cuts  MoneycontrolMUMBAI: Stocks were battered worldwide on Thursday after the US Federal Reserve indicated that its first policy rate cut since the global financial crisis was not ...
Why This Investment Account Is Becoming More Popular  NerdWalletBrokerage accounts offer investors a lot more flexibility than retirement accounts, such as IRAs and 401(k)s. But that flexibility comes at a price: taxes.
Can This New Hawaii Venture Become The Stock Fund For Millennials?  Honolulu Civil BeatA Colorado portfolio manager has big plans for a $44 million S&P 500 index fund that he has brought to Hawaii.
Stocks Tumble As Trump Slams China In Tweet Storm  Investor's Business DailyStocks plunged after Trump tweeted "we don't need China, and, frankly, would be far better off without them." The president planned to speak this afternoon.
An easy solution to RESP investing, 10 TSX dividend stocks with earnings momentum, and the bond market bubble  The Globe and MailParents, here's a task to add to your back to school to-do list: Check the registered education savings plan you set up for your children's college or university ...
How to Pick the Online Broker That's Best for You  Yahoo FinanceNo broker can hit the bull's-eye for every type of client. Use our results to find the best one for you.
Why picking the right mutual fund is key in a tough market  LivemintWhy have mutual fund (MF) returns fallen? Mutual funds primarily invest in equity (stocks) or debt (bonds). On the equity side, mid and small cap MFs have given ...
Top 10 stocks that mutual fund managers bought and sold in March 2019  Moneycontrol.comData for equity flows into mutual funds for March came as a breather after a weak February. An increase in net inflows in equity and income category led to the ...
​Pattie Lovett-Reid: How to get the most bang for your TFSA buck  BNNBloomberg.caThe TFSA, or tax-free savings account, has been around for a decade, but that doesn't mean we are using them to get the biggest bang for our buck. A recent ...
MF shopping list: Top 30 stocks that fund managers bought & sold in June  MoneycontrolMutual funds increased allocation to private banks, consumer, utilities, technology, NBFCs, retail, metals and PSU bank stocks in June, an ICICIdirect report said.
Sensex's rise from 20K to 40K: 5 lessons for equity mutual fund investors  Economic TimesWe look at some critical lessons that equity fund investors learnt during the journey of Sensex reaching 40K.
What India's three largest mutual funds bought and sold in June  LivemintInflows into Indian equity mutual funds jumped the most in three months in June.India's top money manager HDFC Mutual Fund held $22 billion in equities.
Consider investing in direct stocks only if you can monitor portfolio proactively  LivemintDirect stocks can be considered if you have the ability to do research to identify the stocks to be bought as well as to be sold.You should be revisiting your ...
Should you invest in international mutual funds?  LivemintIf you were to sort all equity mutual funds available for retail investment by their one-year performance, international funds would come on top. The best ...
The Taxman Says, Stay Invested  Morningstar.comTiming the stock market is difficult enough, even without the IRS' contribution.
Mutual funds’ exposure to this space at all-time high; should you buy?  Economic TimesMoney managers on Dalal Street continued to shower affection on private banks for the ninth successive month as their exposure hit 19.90 per cent in June, ...
What India's top three mutual funds bought and sold in March  Economic TimesIndias largest money manager held 1.5 trillion rupees in equities.
A young investor’s guide to mutual funds  Economic TimesMany young investors, who are barely a year or two old in their career, are eager to start investing in mutual funds. ETMutualFunds.com receive many queries on ...
Here are a few mutual funds that stocked up on YES Bank in Q4FY19  Business StandardShares of YES Bank tanked 30 per cent in trade on Tuesday, after the bank reported a massive Rs 1,507 crore loss in the fourth quarter of financial year 2018-19 ...
Mutual fund SIPs don't make equity investing risk-free. Here's why  Economic TimesSIPs do reduce the risk of market timing & allow investors to buy more units when their price falls.
Index mutual funds see 60% jump in assets in a year as actively managed funds struggle  Economic TimesIndex mutual funds — a category that aims to mimic returns of benchmarks, like Nifty or Sensex — have seen their assets surge 60% over the past one year as ...
Govt increases limit to disclose investment in stocks, mutual funds for employees  Moneycontrol.com*Service* rules say no government servant shall speculate in any stock, share or other investment.
Mutual funds shooting themselves in the foot?  Economic TimesWhat if banks take a leaf out of Kotak and HDFC Mutual Funds' decision to direct investors to come another day to get their money instead of paying them on the ...
What top mutual funds bought and sold last month  LivemintMumbai: Inflows into Indian equity mutual funds in January were the smallest in two years as heightened market volatility and political uncertainty cooled ...
Actively-managed large cap mutual funds poised for a comeback  Economic TimesDefying predictions of their imminent irrelevance, some actively-managed large cap mutual fund schemes have bounced back to the top of the return chart.
Are you thinking of investing in small and mid cap mutual funds? Here is some advice from fund managers  Economic TimesMutual fund investors have started flocking to mid cap and small cap schemes once again. According to AMFI data released on Monday, the mid cap mutual fund ...
All you need to know about liquid mutual funds  Economic TimesThe NBFC crisis has brought liquid funds back in favour as they carry lower risk than corporate FDs.
What India's top three mutual funds bought and sold in May  LivemintInflows into Indian equity mutual funds in May rebounded from the smallest in 31 months as Prime Minister Narendra Modi's comfortable electoral win spurred ...
Stick to MFs if you lack knowledge on stocks  LivemintWhile equity is surely the way going forward considering your age and the financial goals, how you buy in equity is important.Direct stocks work very well if done ...
Mutual funds or direct equity investment – which is better?  Economic TimesOne big question that often dogs investors is which investing option should they opt for: mutual fund or direct equity? Katalyst Wealth's Ekansh Mittal ends your ...
Should you invest in algorithm-based quant mutual funds?  Economic TimesQuant funds work on a data-driven model that relies on a mix of parameters and algorithms to identify the right stocks at the right time. But can they beat actively ...
MF portfolio doctor: Babji needs to exit direct investments in stocks, take mutual funds route  Economic TimesThe Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals.
Can mutual funds give multibagger returns like stocks?  Economic TimesStocks can be multibaggers. They can offer extraordinary returns in a very short period. Can mutual funds ever do that? This was a question thrown at Rajeev ...
How income from stocks and mutual funds are taxed for an individual  Moneycontrol.comCapital gains from transfer of unlisted share are considered as STCG where period of holding is less than or equal to 24 months, and LTCG when holding period ...
Investment limits Sebi prescribes for mutual funds  LivemintIn case of unrated debt instruments, a mutual fund cannot invest more than 10% of the portfolio in a single issuer and 25% in all such securities.In case of listed ...
Top 25 equity mutual funds failed to deliver positive returns in June  Economic TimesNEW DELHI: Top 25 mutual fund schemes, managing retail money in excess of $1 billion (Rs 7,000 crore) each, failed to deliver positive returns in June.
Why do wealth managers recommend multi cap mutual funds?  Economic TimesMany wealth managers believe multi-cap funds are a good starting point for long-term investors, specially those using SIPs for wealth creation.
Top 30 stocks that fund managers bought & sold in March; do you own any?  Moneycontrol.comData for equity flows into a mutual funds for March came as a breather after a weak February. Increase in net inflows in equity and income category led to the ...
What to do if your mutual fund scheme earns more return than your investment  Economic TimesAre the returns shown in your mutual fund account statement same as the returns delivered by your fund? It is quite likely that you might have earned less than ...
First-time investors can look at these mutual funds for long term  Economic TimesInvestors, who were waiting on the sidelines for the uncertainty to recede, are now looking to deploy their cash. But, valuations remain steep.
Equity funds record highest ever exposure in banking stocks in March 2019  Business TodayAs per the latest data available from the SEBI, overall deployment of equity funds in bank stocks grew around 52 per cent year-on-year (y-o-y) in the month ...
I have been investing in mutual funds via SIPs. Should I make any changes in my schemes?  Economic TimesI have been investing for the past year in the following funds via SIPs: Rs 2,000 in SBI Magnum Multi Cap, Rs 1,000 each in SBI Equity Hybrid Fund and Canara ...
The dangers of high mutual fund inflows  LivemintMutual funds have put ₹2.4 trillion into markets in the last two years.Equity mutual funds receive ₹8000 crore monthly through SIPs.
7 stocks most favoured by mutual funds over last one year  Economic TimesAs the markets hit a speed bump, stocks favoured by mutual funds appear to be safer bets.
Top 8 most common mutual fund investing mistakes and how to avoid them  Business StandardMutual funds, especially equity mutual funds, have played a pivotal role in helping retail investors create wealth over the last 25 years since they actually ...
Active mutual funds fail to reflect index gains  Economic TimesThe Nifty, which has hit all-time highs for the second time in April, has advanced 12% in the last one year. But these gains are yet to reflect in many mutual funds' ...
A look at mistakes committed by investors of equity mutual fund schemes  Moneycontrol.comBalwant Jain. The interest of investors has been shifting from direct equity investing to equity mutual funds over a few years. Though this is a welcome trend, ...
What top 5 money managers bought and sold in February  Economic TimesFebruary was the fourth consecutive month of decline in net investment into equity mutual funds.
I want to invest Rs 1 crore in stocks and mutual funds for 5 years. How should I invest?  Economic TimesYou may consider the following asset allocation: 40% in large-caps; 40% in large and mid-cap, or multi-caps; and remaining 20% in mid- and small-cap funds.
Stop! Too many stocks, mutual funds are not good for you; Buying too many may not get you more  The Financial ExpressHandling the overall risk of investments is crucial, but not at the cost of not meeting your financial goals. Over-diversification can do this.
Should you invest in mid- and small-cap funds now?  LivemintWith the new government taking office with a massive majority, it has the elbow room to push through the reforms. No wonder markets are expecting the ...
Defaults, downgrades hit debt mutual funds: What investors should know and do now  Economic TimesAs debt mutual funds land in trouble following multiple defaults and downgrades by bond issuers, ET Wealth addresses some key questions from worried ...
Here’s a better tool to judge mutual fund performance than simple 1-year, 3-year returns  Economic TimesOne invests in mutual funds to earn potentially higher returns than those in traditional investment products, and I'm sure everyone looks at the one-year, ...
Sebi allows mutual funds in exchange traded commodity derivatives  Economic TimesNEW DELHI: The Securities and Exchange Board of India (Sebi) on Tuesday allowed mutual funds to participate in exchange-traded commodity derivatives ...

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