In Business, But Still Not Public

About 10 years ago, I invested $10,000 in a software company. I was told by the salesman that the stock was not listed on any market but would be going public in one or two years. Supposedly, I could sell it at that time and more than likely make a profit. Well, the company is still in business, but it's still not public. I can't sell this stock or write it off on our taxes. All I think about is the interest that $10,000 would have earned in 10 years.

— Ron W., Holiday, Fla.

The Fool Responds: You're right — even if you averaged a measly 1 percent annual interest rate, you would have made more than a thousand dollars! It's risky to invest in companies that are not yet public, because even though they may plan to have an IPO (initial public offering) in the near future, it might get postponed for a long time. Few companies, for example, want to issue their initial shares in a shaky or falling market. Beware of new IPOs, too, as they can be volatile and risky.

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