Investor Profile

It can indeed be difficult to decide whether to sell an IPO if you've got a quick profit, or hold it in the hopes it will produce additional gains, especially given the performance of several recent issues that have doubled in value - and even tripled - soon after they began trading. However, Tracy found that "if you buy an IPO from a brokerage and sell it within 30 days, it's called 'flipping.' Lots of people flip IPOs, especially the big buyers, but [with] online brokerages like E*trade, a long-term practice of flipping will cost you approval to invest in further offerings."

Tracy believes investors should avoid flipping IPOs and should instead consider them as short- to medium-term holds. And she is serious about her IPO strategy. She says, "Our portfolio is made up largely of recently-issued IPOs which we are holding for the short- term. Frankly, we hope to make enough profit on these risky investments to enable us to put money into stocks for the long-term."