Apparently their protective investment strategy is to not actually be able to invest in anything.
And it’s worked out great so far! (In that they haven’t lost any money)
But of course this might not work out so well once they actually can invest in something.
Mind you, there have been fewer than a dozen, but I don’t think I’ve ever gotten in on an IPO with less than around twenty grand. I’m actually kind of surprised the broker your husband contacted stayed on the telephone with him after hearing the amount you guys were working with.
I do OK in the market. My brother’s a broker, though, and the money I invest isn’t tied to anything important like my house, college funds, retirement funds, etc.
Wow.
I must be a super miser.
If I am not paying off all current debt every month, I feel like I am in default. Generally, I pay on the date due, but it takes nerves of steel not to pay off upon notification.
But then, I have never paid anything to any of the financial corporations with which I do business. Not one single penny. The last one that tried to get a nickel of mine got closed out by the end of business. (Well, actually, it was $16 bucks)
They get to use my money for free. If they want profits beyond that, screw 'em.
My bank shares the corporate profits with us depositors, since it is a cooperative owned by the member/depositors. They also handle my insurance, same deal, only they are smart enough to credit the profits as a reduction in premium, so it isn’t taxable.
My stock buys cost me a flat rate of seven bucks. And I damned sure hate making one, because that seven bucks is actually 14 bucks worth of whatever profit I might have made on the stock.
Buy low. Don’t sell. If it isn’t worth holding on to, why buy it in the first place? If you have to borrow, have repayment budgeted before you borrow, borrow for the shortest possible term, and the lowest possible rate, and repay on time. You are the one who pays for this.
If you are a typical middle class American, just going without anything but absolute necessities for one month, long enough to go from credit buying to cash buying, you can enjoy a ten to twent percent increase in your buying power. What you buy will cost you ten percent less, and if you don’t start buying more, eventually what you don’t spend will be enough to earn you more money than your credit buying is costing you now. This is especially true if you are under thirty.
Tris
Did you hear about all those folks who borrowed money to get started in the late 1920s?
Ah, yes, the good ol’ days of buying on margin. 
Even Clark Howard is saying Vonage wasn’t a good buy. I’m just glad the stars in our eyes didn’t blind us (or hurt us.) It sounds like we got lucky, and I will definitely be more careful the next time an IPO rolls in my direction.
Yeah, I think you may have dodged a bullet. But I do think you need to re-evaluate your investment strategy. What you did (or rather tried since your offer to purchase was declined) here might be better termed a “tactic” than a strategy. Since it seems from your posts that you were unaware of Vonage’s consistent string of losses, you probably didn’t read the prospectus or look at any company financials. This isn’t a good practice - whether trying to jump in and turnover quickly on a potentially hot IPO (and it’s even worse if you’re trying to borrow money at market rates to make the purchase), or purchasing an issue for the long-term.
In any event, there are several IPO’s pretty much every week. Fer instance, MasterCard is expected to do one tomorrow - probably. And it actually looks much better than the Vonage IPO. MasterCard is making money right now - lots of it. But again, trying a quick turn on an IPO is risky business. Much better to wait it out a few weeks, or months, and re-evaluate the issue for a long-term purchase.
If you want some more unsolicited advice about jumping into the stock market, I suggest getting a Sharebuilder.com account and approaching the thing slowly and steadily - much like you do in your 401(k), you can set it up to make regular purchases of desired issues directly from your bank accounts. Risk is much easier to manage with a steady, long-term approach; what I mean, is instead of accepting a big risk (and the extreme volatility) buying stock via the IPO, you can better regulate your risk by purchasing established companies through comparison of their P/E’s and capitalization. You might also consider, as a risk hedging strategy, purchase of stocks which pay dividends along with stocks bought for growth alone. The research tools on at Sharebuilder are really quite good - even the IPO ones.
And take special note of what Triskadecamus posted. Sage advice about buying and holding issues. Emotion has no place in an investment strategy.
Oh, believe me, we are normally very cautious. Ivylad and I spent an entire weekend researching Vanguard Roth IRA’s before deciding on which ones we would invest in, and they’ve done very well so far. Plus my 401k is churning along quite nicely.
Call this a momentary lapse. We don’t normally play the stock market.
To make money, of course! There are stocks I hold on to, but there’s a large majority we purchased because the price was low (say, for example, the company was in a slump or an IPO) for the sole purpose of selling once the price reached a certain amount.
That’s what you were trying to do. Except you’re borrowing from your bank, not your brokerage house.
That’s kinda what I thought; a conservative investment strategy. You’ve always seemed pretty level-headed to me and this did seem kinda outta character. Glad everything worked out okay.
I am suitably chastened. I know the stock market is not a toy, and I will promise to look before I leap.
Playing IPOs is a bit like playing Vegas, only without the free booze, rented convertibles and showgirls.
At least when you lose money in Vegas you’re having fun losing it.
Some truth to that. Keep in mind that IPOs are often about hype. The real money is made by the people who have prerelease shares that were priced at a fraction of the IPO, but that isn’t the public. That is the original investors, sometimes the employees. All those people ALREADY own shares (or own options) and have an interest in seeing the price after IPO go high, because this is the first time their shares and options can be turned into cash. So the investors and owners who are IPOing want to create hype to cash out some of their own investment.
Motivations in an IPO are not 100% pure and disinterested.
Don’t sweat it.
I could post a pretty good sized list of stuff I’ve done in the market that was completely stupid. Of course, most people who bought anything between 1998 and 2001, or so, could say the same thing.
However, I wish someone had told me early on the things that others (and I) told you in this thread.
Although, I never borrowed against my house to buy stock. That’s a pretty good one. 
The important thing is to make the mistakes early when they don’t hurt as bad.
Well, yeah, in theory you could do it. If you KNEW you had an investment that would return %30, it makes sense to take out as much debt as you could.
I’ll second the ‘don’t take a loan to buy stocks’.
Roughly speaking, you’ll have to a) do better than the interest rate on your loan, and b) do better then that plus the hit to the feds on capital gains.
So, for every 10 dollars you invest, You’ll have to make 2.00 to break even.