After months of hype Facebook (FB) is expected to become a publicly traded stock at the end of this week. The richly valued company may not be for every investor, but those who've decided they need to own shares of the social media giant should know the right and wrong ways to buy the next hot stock. The frenzy surrounding any highly anticipated IPO can lead investors into mistakes that cost them real money. Josh Brown, author of Backstage Wall Street and editor of theReformedBroker.com, has some tips on how to buy Facebook shares.
1. Avoid "Facebook Funds"
Contrary to what you might hear, the funds and companies that already have Facebook stakes aren't likely to suddenly shoot up in value when the stock starts trading. Don't believe anyone who tells you to buy some company that either has an investment in or is "like" Facebook. Stick to the real deal.
"Avoid any kind of indirect way of owning it, just own it," Brown emphasizes. That's what the company going public is all about.
