If investors wait for a week to invest in the year's hottest IPO by Twitter, they could boost their returns by more than 60 percent, a recent research shows.
Analysts suggest that in seven of nine initial public offerings, including Amazon, Google and Zynga, it proved beneficial to wait for the frenzy to burn off.
According to the New York Post, waiting for the rush to pass, allows one to compare the price of the first trade of the IPO to its closing price after five trading days.
Shares of Facebook, Amazon, LinkedIn, eBay, Pandora, Zynga and Groupon each fell after five days, while Google and Yahoo! rose.
The report said that waiting is a strategy that savvy brokers use for clients, as well as disciplined fund managers who don't have access to pre-IPO prices.
Chief Executive Bruno del Ama of Global X Funds, a family of exchange traded funds in New York City, revealed that the firm waits a week to buy stock for its funds, and bases this practice on studies it has conducted showing that waiting a week results in prices that are 'more reflective' of a company's long-term value.
Del Ama further said that the firm's Social Media ETF will be among those avoiding the frenzy of Twitter's IPO, the report added.
