FACEBOOK STOCK: A BAD INTRODUCTION TO THE MARKET FOR BEGINNERS

We are now one day removed from all the crazy hype that the Facebook IPO generated. Almost every article you read today is saying negative things about the company and the stock is down about 10% as I write this.

Clearly it has not been a good opening for Facebook. What I fear most though, is that many first time individual investors are going to sour on the stock market as a whole if Facebook doesn't recover.

I have a couple stock market blogs and the number of hits they got last week leading up to the IPO showed me that many people were going to make Facebook the first stock they have ever bought. It is a company millions of people use every day and thus they understand it and with all they hype, thought they better invest in it.

Anything that introduces people to investing in stocks I think is a good thing. The more people that learn how to buy stocks and take charge of their retirement, the better.

For many, Facebook is clearly the stock that has driven them to open their first account with a discount broker account and go through the process of funding their account and buying that first stock. All that might have been intimidating to some but they still did it because they didn't want to miss out on the next big stock. Who wants to miss out on getting in on the ground floor of the next Apple or Microsoft, right?

Personally I don't care whether Facebook makes billions of dollars or go bankrupt as I didn't purchase any of the stock and I don't plan on buying any either. But I don't want to see people have their first experience with the stock market be a negative one.

I hope this ridiculously overhyped Facebook IPO can at least do one good thing: bring more investors into the market who stay and make building up their portfolios a lifetime goal. It will benefit them with their retirement and it will benefit all of us by bringing new blood into the market.


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