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Florida Trusts and IPO’s: why Florida trustees should avoid the temptation to flip

Uncategorized Oct 30, 2013

Should Florida trustees invest in IPO’s?  Not UFO’s, but initial public offerings of publicly traded stock, like Facebook and the much anticipated Twitter, Inc.  Today’s Wall Street Journal feature an article on IPO’s on the front page of that financial newspaper’s “Money & Investing” section.  IPOs were all the rage in the 1990’s as tech companies soared and the market roared, and anything with a “.net” or “.com” went public. IPO’s are not for Florida trusts and Florida trustees should not be buying IPOs unless the purchase of the particular security is part of the overall investment strategy or plan of the trustee.  Previously, I’ve written about Florida trustees and the Florida prudent investor rule, suggesting that a Florida trustee investing in index funds across a diversified mix is about as close to bulletproof as you can get.   Picking individual stocks is not for the individual trustee.  Buying IPOs for a quick “pop” is speculative and not for Florida trusts, or the beneficiaries who Florida trustees serve.   The Wall Street Journal is a great place to get ideas and learn about IPOs for your own, individual account, so keep the IPOs there: and not in the Florida trust.