Facebook IPO: five things to know before buying the stock

About 1 out of every 8 people on the planet have a Facebook account. Now, with the arrival of a public stock offering, all those people have a chance to be part owners of this social hub. Should you buy? Here are five things to consider.

5. If you really want to own it ...

Investors who feel they can't wait to own Facebook can still hedge their risk in a few ways. One approach is to buy in gradually, not purchase your whole stake on the first trading day.

Second, you can use a "limit order" to avoid paying a higher-than-necessary price. For example, if the stock is trading about $42 per share and you choose to buy with a limit of $41, your purchase will occur when the stock dips to that level.

Third, investment advisers say, it's vital to remain well diversified. Be wary of putting more than a few percentage points of your savings into a single stock, especially one that might be at risk of rising on a tide of untethered emotion.

Finally, remember this: Many diversified mutual funds will soon own the stock, so you can end up with a stake in Facebook even if you don't buy it directly.
 

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