Here are some reasons why you may want to rethink investing in an IPO

For multiple companies, it's the moment they've been waiting for: The window has opened for them to go public.

You've probably heard the names, including Levi Strauss, which made its public market debut this week. Ride-sharing businesses Lyft and Uber, among other companies, are also teed up to go public in the coming months.

But if you're thinking you want to invest in these stocks, experts generally have one word of advice: Wait.

"IPOs aren't just about, 'Oh, I want to invest in the things I know,'" said Kathleen Smith, principal and manager of IPO ETFs at Renaissance Capital. "It's about, 'How do I make money investing in these?''

"It doesn't do any good to own something when you're losing money in it."

In today's market, chances are that buying in on a newly public stock could be a losing proposition. Financial experts say there are several reasons why.

You could already be at a disadvantage

Even though the stock is not yet public, you could already be behind.

Just accessing IPO shares is difficult, Smith noted, because most shares will be allocated to big institutional clients of Wall Street firms.

What's more, many of the names going public now have waited longer to go public and seen their valuations surge during that time, said Nicole Tanenbaum, chief investment strategist at Chequers Financial Management

Uber and Lyft, for example, are considered unicorns, or startup companies valued at more than $1 billion. Along the way, they have raised large amounts of private funding.

Uber previously raised roughly $20 billion in funding and is eyeing a $120 billion valuation when it goes public. Lyft has raised more than $5 billion and plans to be valued at $23 billion.

show chapters Profitability is an issue for big tech IPOs, sector expert says    4:01 PM ET Thu, 21 March 2019 | 04:38

"When they do go public, much of the appreciation has already happened in the private markets," Tanenbaum said. That means that earlier investors, who got in at a lower price, stand to see greater gains.

"The upside for the public investor is much more diminished," Tanenbaum said.

Some companies that are going public these days — including Levi Strauss and Lyft — are pursuing a dual-class structure. That means that certain investors — notably company management — have preferential shares and voting rights compared to a separate common stock that typically comes with just one vote per share.

"In the long run, it's not good," Smith said. "If problems happen with the company, you want to be able to know the founders can't just do what they want without some kind of checks and balances."

You might not be able to stomach the ups and downs

While many IPOs close up on their first day, that first day pop and subsequent run up is not guaranteed, according to Michael McKevitt, director of financial planning at Guillaume & Freckman.

Think back to Facebook's IPO in May 2012. The company went to market at a high price and investors suffered losses at the outset.

It took about a year for Facebook's stock to get back to its opening price. Today, the stock's performance would be considered a success — as long as you held on.

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"Even if you pick the right company, like Facebook, which has done amazingly well, you still had to put up with a 50 percent decline, multiple 40 percent declines, multiple 20 percent declines," McKevitt said. "How many people bought it and held onto it through all of these moves?"

Investors would be wise to keep in mind that the lock up period could affect the stock price, said Megan Gorman, managing partner at Chequers Financial Management.

Lock up periods are a set amount of time, typically three to six months, when large shareholders are prohibited from selling their shares following an IPO. Once that time is over, that can sway the stock price.

"You can sometimes see the stock price has a pull back — not always, but there can be — when the lockup ends," Gorman said.

You could be investing the wrong way

All of those considerations mean one thing: Investing in a newly public company might not be the right decision for you — at least for now.

"If you want to be the guy or gal at the cocktail party or the golf course saying that you bought one of those unicorns when they IPO'ed, as long as you go in with the expectation that it might not be the best investment you ever make … that's great," Gorman said. "But if this is your retirement money, if this is all of your savings, going in an IPO doesn't make sense from a big picture perspective."

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Ultimately, you can eventually get exposure to these companies by investing in mutual funds. Renaissance Capital offers an ETF that consists of a basket of newly public companies. Companies Lyft and Uber will be candidates for inclusion in that fund once they start trading, Smith said.

Waiting for the shares to come to your price can often be the best strategy, according to experts.

That's what McKevitt said he encouraged one client to do when he inquired about investing in Lyft's IPO.

"You have to wait several months at least for more market participants to assess the stock," McKevitt said. "Once it starts trading over that amount of time, it's more likely to get a fair price."

Over 100 stocks hit 52-week low; realty, telecom & metal stocks biggest losers

The Indian benchmark indices have extended the early morning losses and are trading deep in the red with Nifty down 136 points, trading at 11,320 whereas Sensex has fallen 463 points, trading at 37,701.

Nifty Realty is down over 2 percent dragged by Indiabulls Real Estate that shed over 4 percent followed by DLF, Prestige Estate, Sunteck Realty and Unitech. The S&P BSE Realty index also trading a couple of percentage lower with losses from Indiabulls Real Estate, DLF, Sobha, Prestige Estates, Sunteck Realty, Godrej Properties, Mahindra Life, Oberoi Realty and Phoenix Mills.

Telecom stocks have also taken a beating. The top losers are Vodafone Idea which is down 5 percent while Reliance Communications, Optiemus Infracom and GTL Infra have shed 4 percent each. The other losers are MTNL, Tejas Networks, GTPL, Bharti Infratel, Aksh Opti Fibre, TTML, Tata Communications and Bharti Airtel.

From the metal space, the top losers are SAIL that shed 3 percent followed by Vedanta, Jindal Steel and Power, NMDC, JSW Steel, Hindalco Industries, Hindustan Zinc, Tata Steel and NALCO.

related news Jet Airways surges 15% on report of resignation of Naresh Goyal & Anita Goyal Hero Motocorp touches 52-week low, sheds over 7% in 9 sessions

Elara Capital has recommended a buy on Bharti Airtel with a target of Rs 520 based on 6.5x FY21E EV/EBITDA adjusted for the minority holding in Bharti Infratel, but without adjusting for the upcoming rights issue.

Over 100 stocks have hit 52-week low on the BSE including names like Lakshmi Energy, Petron Engineering, Genesys International, Igarashi Motors, Hero MotoCorp, Uttam Value Steel, SRS Finance and Ballarpur Industries among others.

The breadth of the market favoured the declines with 362 stocks advancing and 1,383 declining while 357 remained unchanged. On the BSE, 664 stocks advanced, 1,897 declined and 166 remained unchanged. First Published on Mar 25, 2019 02:51 pm

Should you give up privacy for cheaper car…

Michael Aminov-Tobin almost forgot a car insurance company was tracking his driving. He wasn't paying extra attention to how fast he drove or how hard he hit his brakes. So he was astonished when the company offered to insure his 2016 Hyundai Veloster Turbo for $100 a month less than he'd been paying.

"When it popped up with the price that it did, I was like, 'Holy crap, that's awesome!'" says Aminov-Tobin, 25, who operates a video production firm from his home near Columbus, Ohio.

He benefited from a growing trend known as usage-based insurance, or UBI, in which auto insurance companies electronically monitor a customer's driving and offer discounts in exchange.

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Such programs can be a great deal for careful drivers and low-mileage users, but they also present significant privacy concerns, experts say. Before agreeing to be monitored, drivers should understand the risks and ask the right questions.

"The data is so rich," says Ting Zhu, an associate professor for Purdue University's Krannert School of Management who studies UBI. "They know exactly where you go and when you go."

Keys sit on a car insurance policy. (Photo: The Motley Fool)

The draw for drivers

Letting people prove they're safe drivers makes auto insurance pricing more fair, advocates say.

Traditional car insurance rates are based on your driving record, plus demographic factors like age, location and marital status. While usage-based policies still consider these factors, they base part of the rate on your driving behavior using telematics technology. Data are typically gathered via a plug-in device for your car's diagnostic port or a smartphone app.

"Good drivers should pay less," says Robert Hunter, director of insurance for the Consumer Federation of America. "How you drive, and not who you are, should determine your rate."

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Discounts can be significant for good drivers. With Nationwide's SmartRide, discounts can reach 40 percent, says David Arango, senior vice president of personal lines, which include auto and home. At Root Insurance, the startup that insures Aminov-Tobin, the best drivers can cut their rates nearly in half, says CEO Alex Timm. At both companies, the executives say, typical savings are around 20 percent.

Low-mileage drivers can benefit, too. Evan Makovsky, 42, of Hoboken, New Jersey, estimates he saved $1,000 a year by switching to Metromile, which charges a monthly base rate plus a per-mile rate. Makovsky drives his 2009 Volkswagen Passat mostly on weekends.

But rates aren't always better with usage-based insurance. For instance, if you change jobs and have a longer commute, a pay-per-mile policy could become costly. And with Progressive's Snapshot program, which monitors how you drive, rates go up for about 20 percent of drivers, according to the insurer. Bad drivers won't pay extra at Nationwide, Arango says, but they can lose their initial discount.

FacebookTwitterGoogle+LinkedIn25 most expensive car models to insure FullscreenPost to FacebookPosted!

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To determine the 25 Cars with the highest insurance costs, 24/7 Wall St. reviewed data on insurance claim payments made by insurers by make and model, provided by the Insurance Institute for Highway Safety, a nonprofit research organization funded by auto insurers. The costs include six types of insurance: collision, property damage, comprehensive, personal injury, medical payment, and bodily injury. The model that is most expensive to insure had the highest overall average cost to the insurer per year. These data are for 575 vehicles of 2014-2016 model years sold in the United States. No. 25 is the Kia Forte: Annual average insurance paid: $1,155.82; Annual collision insurance paid: $425.10; Type: Small four-door; Retail price:$16,800. Bruce Benedict, KIAFullscreen24. Mercedes-Benz C class four-door 2WD: 
Annual average insurance paid: $1,157.34; 
Annual collision insurance paid: $608.40; 
Type: Midsize luxury; 
Retail price:$40,250. Mercedes-BenzFullscreen23. Nissan Versa: 
Annual average insurance paid:$1,157.59; Annual collision insurance paid:$444.60
; Type:Small four-door;
 Retail price:$12,110. NissanFullscreen22. Nissan Sentra:
 Annual average insurance paid:$1,165.05;
 Annual collision insurance paid:$471.90;
 Type: Small four-door;
 Retail price:$16,990. NissanFullscreen21. Lexus IS 350 four-door 2WD:
 Annual average insurance paid:$1,167.11
; Annual collision insurance paid:$627.90;
 Type:Midsize luxury
; Retail price:$38,210. ToyotaFullscreen20. Audi A4 four-door 2WD:
 Annual average insurance paid:$1,169.13;
 Annual collision insurance paid:$666.90;
 Type:Midsize luxury
; Retail price:$36,000. AUDI AGFullscreen19. Land Rover Range Rover Sport four-door 4WD:
 Annual average insurance paid: $1,173.05;
 Annual collision insurance paid: $631.80
; Type: Midsize luxury; SUV
 Retail price:$66,750. Land RoverFullscreen18. Infiniti Q50 four-door 4WD:
 Annual average insurance paid:$1,182.32;
 Annual collision insurance paid:$612.30;
 Type:Midsize luxury;
 Retail price:$66,750. InfinitiFullscreen17. Dodge Dart
: Annual average insurance paid:$1,187.55
; Annual collision insurance paid:$468.00;
 Type:Small four-door
; Retail price:$16,995. FCAFullscreen16. Kia Rio: Annual average insurance paid:$1,191.26;
 Annual collision insurance paid:$413.40;
 Type:Mini four-door;
 Retail price:$13,900. KiaFullscreen15. Nissan Maxima: Annual average insurance paid:$1,237.68
; Annual collision insurance paid:$596.70;
 Type:Midsize four-door;
 Retail price:$33,270. NissanFullscreen14. Scion tC:
 Annual average insurance paid:$1,237.74;
 Annual collision insurance paid:$518.70;
 Type:Small two-door;
 Retail price:$19,385. Robert Deutsch, USA TODAYFullscreen13. Chrysler 200 2WD
: Annual average insurance paid:$1,261.87
; Annual collision insurance paid:$471.90;
 Type:Midsize four-door;
 Retail price:$22,115. ChryslerFullscreen12. Scion iA: Annual average insurance paid:$1,274.51;
 Annual collision insurance paid:$530.40;
 Type:Mini four-door;
 Retail price:$15,700. David Dewhurst PhotographyFullscreen11. Ford Mustang two-door
: Annual average insurance paid:$1,291.53;
 Annual collision insurance paid:$686.40
; Type:Midsize sports cars;
 Retail price:$25,680. FordFullscreen10. Lexus GS 350 four-door 2WD
: Annual average insurance paid:$1,295.44;
 Annual collision insurance paid:$705.90;
 Type:Large luxury
; Retail price:$46,310. LexusFullscreen9. BMW 4 series two-door 2WD:
 Annual average insurance paid:$1,306.51;
 Annual collision insurance paid:$659.10;
 Type:Midsize luxury;
 Retail price:$43,300. TONY DING, APFullscreen8. Audi A7 four-door 4WD:
 Annual average insurance paid:$1,322.51; Annual collision insurance paid:$830.70;
 Type:Large luxury
; Retail price:$69,700. AUDI AGFullscreen7. Dodge Challenger
: Annual average insurance paid:$1,335.79; Annual collision insurance paid:$627.90;
 Type:Large two-door
; Retail price:$27,295. ChryslerFullscreen6. Kia Optima hybrid:
 Annual average insurance paid:$1,355.13
; Annual collision insurance paid:$592.80;
 Type:Midsize four-door
; Retail price:$25,995. KIAFullscreen5. Dodge Charger 2WD
: Annual average insurance paid:$1,385.61;
 Annual collision insurance paid:$569.40;
 Type:Large four-door;
 Retail price:$28,995. ChryslerFullscreen4. Scion FR-S
: Annual average insurance paid:$1,403.67
; Annual collision insurance paid:$752.70;
 Type:Small two-door
; Retail price:$25,305. ScionFullscreen3. Mitsubishi Lancer 2WD:
 Annual average insurance paid:$1,458.48;
 Annual collision insurance paid:$561.60
; Type:Small four-door
; Retail price:$17,79. MitsubishiFullscreen2. Mercedes-Benz S class four-door LWB 2WD:
 Annual average insurance paid:$1,540.63;
 Annual collision insurance paid:$803.40;
 Type:Large luxury
; Retail price:$89,900. Mercedes-BenzFullscreen1. Tesla Model S four-door electric 4WD: Annual average insurance paid: $1,789.48
; Annual collision insurance paid: $1310.40; Type: Large luxury
; Retail price: $74,500.   TeslaFullscreenInterested in this topic? You may also want to view these photo galleries:Replay1 of 252 of 253 of 254 of 255 of 256 of 257 of 258 of 259 of 2510 of 2511 of 2512 of 2513 of 2514 of 2515 of 2516 of 2517 of 2518 of 2519 of 2520 of 2521 of 2522 of 2523 of 2524 of 2525 of 25AutoplayShow ThumbnailsShow CaptionsLast SlideNext SlideData privacy concerns

Whether the price break is worth the privacy you relinquish by having your driving monitored depends on how you view the risks.

Aminov-Tobin wasn't concerned: "If you want the best rates, I guess you have to sacrifice a little," he says.

But privacy expert Jen King fears drivers may sacrifice more than they realize.

"Where you go every day can tell people a lot about what you're interested in, where you live, who you're associating with," says King, director of consumer privacy for the Center for Internet and Society at Stanford Law School.

Even if the information isn't sold, she says, it might be used in ways the driver didn't anticipate.

A data breach is another danger, says Purdue's Zhu. She points to the 2013 Target breach in which cyberattackers stole the personal information of millions of customers. Zhu says her research found that after the breach, drivers were more likely to drop usage-based auto insurance.

Nevertheless, UBI seems to be gaining traction. A J.D. Power study showed 10 percent of insurance customers used such programs in 2018, up from 8 percent the previous two years. Though the policies aren't universally available, the National Association of Insurance Commissioners estimates 7 in 10 auto insurers will use monitoring technology by next year.

FacebookTwitterGoogle+LinkedIn25 cheapest cars to insure FullscreenPost to FacebookPosted!

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To determine the 25 Cars with the lowest insurance costs, 24/7 Wall St. reviewed data on insurance claim payments made by insurers by make and model, provided by the Insurance Institute for Highway Safety, a nonprofit research organization funded by auto insurers. The costs include six types of insurance: collision, property damage, comprehensive, personal injury, medical payment, and bodily injury. The model that is most expensive to insure had the highest overall average cost to the insurer per year. These data are for 575 vehicles of 2014-2016 model years sold in the United States. Average annual insurance payments account for both the frequency of accidents, as well as the average payment made, by model. No.25. Toyota Sequoia four-door 4WD: Annual average insurance paid: $719.60; Annual collision insurance paid: $319.80; Type: Large SUV; Retail price: $48,400. Toyota, ToyotaFullscreen24. Chevrolet Traverse four-door 4WD: Annual average insurance paid: $716.68; Annual collision insurance paid: $284.70; Type: Large SUV; Retail price: $47,500. Jim Frenak-FPI StudiosFullscreen23. GMC Acadia four-door 2WD: Annual average insurance paid: $712.83; Annual collision insurance paid: $304.20; Type: Large SUV; Retail price: $29,000. Jim Haefner, General Motors, via APFullscreen22. Ford Edge four-door 2WD: Annual average insurance paid: $693.74; Annual collision insurance paid: $304.20; Type: Midsize SUV; Retail price: $29,315. Mandi Wright, Detroit Free PressFullscreen21. Ford F-150 SuperCab 4WD: Annual average insurance paid: $690.91; Annual collision insurance paid: $273.00; Type: Large pickup; Retail price: $27,705. Steve Petrovich, Detroit Free PressFullscreen20. Toyota 4Runner four-door 4WD: Annual average insurance paid: $688.12; Annual collision insurance paid: $292.50; Type: Midsize SUV; Retail price: $34,610. David Dewhurst, ToyotaFullscreen19. Ford F-250 SuperCab 4WD: Annual average insurance paid: $684.51; Annual collision insurance paid: $249.60; Type: Large pickup; Retail price: $33,150. Ford Motor Co.Fullscreen18. Subaru XV Crosstrek 4WD with Eyesight: Annual average insurance paid: $680.94; Annual collision insurance paid: $288.60; Type: Small station wagons/minivans; Retail price: $21,595. Frederic J. Brown, AFP/Getty ImagesFullscreen17. Mini Countryman 4WD: Annual average insurance paid: $680.94; Annual collision insurance paid: $312.00; Type: Small station wagons/minivans; Retail price: $26,600. None, MiniFullscreen16. Honda Odyssey: Annual average insurance paid: $680.40; Annual collision insurance paid: $296.40; Type: Large station wagons/minivans; Retail price: $29,990. Honda via APFullscreen15. Honda CR-V four-door 4WD: Annual average insurance paid: $678.46; Annual collision insurance paid: $269.10; Type: Small SUV; Retail price: $24,250. HondaFullscreen14. Honda Pilot four-door 2WD: Annual average insurance paid: $677.38; Annual collision insurance paid: $284.70; Type: Midsize SUV; Retail price: $30,900. Honda, HondaFullscreen13. Nissan Leaf electric: Annual average insurance paid: $675.03; Annual collision insurance paid: $319.80; Type: Small four-door; Retail price: $29,990. NissanFullscreen12. Chevrolet Corvette convertible: Annual average insurance paid: $671.58; Annual collision insurance paid: $417.30; Type: Midsize sports cars; Retail price: $55,495. Alan VanderkaayFullscreen11. Subaru Legacy 4WD with Eyesight: Annual average insurance paid: $667.79; Annual collision insurance paid: $296.40; Type: Midsize four-door; Retail price:$22,195. Scott Olson, Getty ImagesFullscreen10. Volvo XC60 four-door 2WD: Annual average insurance paid: $665.28; Annual collision insurance paid: $315.90; Type: Midsize luxury SUV; Retail price: $41,500. Cyril Zingaro, APFullscreen9. Ford Expedition four-door 2WD: Annual average insurance paid: $660.16; Annual collision insurance paid: $284.70; Type: Large SUV; Retail price: $51,790. Ford Motor Co.Fullscreen8. Acura MDX four-door 2WD: Annual average insurance paid: $660.06; Annual collision insurance paid: $280.80; Type: Midsize luxury SUV; Retail price: $44,200. AcuraFullscreen7. Mazda CX-5 four-door 2WD: Annual average insurance paid: $649.78; Annual collision insurance paid: $245.70; Type: Small SUV; Retail price: $24,150. MazdaFullscreen6. Jeep Wrangler two-door SWB 4WD: Annual average insurance paid: $647.85; Annual collision insurance paid: $206.70; Type: Small SUV; Retail price: $23,995. Fiat Chrysler Automobiles via APFullscreen5. Subaru Forester four-door 4WD with Eyesight: Annual average insurance paid: $645.85; Annual collision insurance paid: $273.00; Type: Small SUV; Retail price: $22,795. Uncredited, Subaru via APFullscreen4. GMC Canyon crew cab 4WD: Annual average insurance paid: $633.70; Annual collision insurance paid: $257.40; Type: Small pickup; Retail price: $21,100. Jim Fets, GMCFullscreen3. Chevrolet Silverado 1500 4WD: Annual average insurance paid: $620.47;; Annual collision insurance paid: $253.50; Type: Large pickup; Retail price: $28,300. GMFulls