Global IPOs down to lowest level in 5 years

Initial public offerings (IPOs) are considered by some economists to be an important sign of financial health for a company, because these events show that those organizations are capable of handling a more complex investor environment while still achieving successful levels of growth.

According to various media reports, including Bloomberg News, fears about the state of the global economy and ongoing issues in Asia, Europe and the Americas have pushed corporate leaders to withhold from undertaking IPOs. Roughly $112 billion was collected during 2012, with $41 billion originating in the United States, which the source stated is the lowest in 5 years.

One major concern, experts told Bloomberg, is that these companies can't guarantee that there will be a fair assessment performed by potential investors.

"Many companies may have felt that the broader economic environment and their resultant earnings didn’t represent the true worth of their businesses," Darrell Uden, an equity markets expert from UBS AG, told Bloomberg in an interview. "Many chose to wait for a few more earnings cycles to ensure a better valuation."

Additionally, the Facebook IPO – which saw that company's stock price plunge dramatically from its opening price – has effectively scared some prospective offerings off the market for at least a few years. Despite the $16 billion worth of interest that the deal accumulated, Bloomberg reported that retail investors from around the country remain concerned about future prospects and the risks of repeating that scenario.

If you're an investor, these developments might be cause for concern as they could be warning signs of future economic turbulence. To learn more about ways that you can prepare your portfolio for these kinds of challenges, visit GreatWealthStrategies.com today and receive a "Free Game Plan Report."