The most impressive gain was the most recent one: OpenTable Inc. (NASDAQ: OPEN). The stock was up almost 60% on the first day it traded. That's the largest gain for an IPO in 18 months. In April, Rosetta Stone Inc. (NYSE: RST) (a language training software firm) saw its shares move up by 40% in its debut. DigitalGlobe Inc. (NYSE: DGI), listed last week, traded higher by 13% on its first day.

Conversely, the last three IPOs in 2008 saw their shares decline on their first days of trading.

Investment bankers like to price IPOs so that the stock will enjoy an initial jump of between 10% and 20%. That gives investors who bought the IPO a little return right away (though new investors are discouraged from selling into any rally). However, when an IPO trades up 30% or 40% on the first day, there's trouble in pricing paradise.

The issuers tend to get upset with their bankers because they obviously could have brought more money into the company if they priced the deal at a higher level. The bankers, in this environment, most likely would respond that they needed to "underprice" the stock so that risk takers would buy it. In other words, buyers need more incentive to buy new issues in this volatile, difficult market. A pop of 30% to 40% will convince them that it's OK to buy IPOs again. The issuer would still be angry.

There's also competition in the market for investors' money. Banks are lining up to offer more stock, known as "follow-on" offerings. Ones like Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC) and Morgan Stanley (NYSE: MS). In May alone, there were $39.2 billion worth of follow-ons. 44% of that money went to financials. It's a record for one month of follow-on stock.

So the real question for investors is: should you buy IPOs? It's not an easy one to answer because of two things. First, each company has its own story, so a generic answer isn't sufficient. You need to study each prospectus carefully. In this market, without a history of growing revenues and profits (definitely profits), it's hard to make a case for buying one. The second element is that you have to be a client of the underwriting firm to get in on an IPO. In other words, if your brokerage firm is not part of the underwriting or selling group, you can't buy the stock at the IPO price.

So should you buy it in the secondary market, the day it opens for trading? Not if it's jumping by 30% or 40%. As this is being written, Open Table is trading at $26.50, well below its high of $35.50. Usually a stock that goes up that quickly will find sellers who will take the money and run. After all, a return of 30% or 40% in a year would be fantastic. To achieve it in a day or two is extraordinary. Don't be quick to jump on an IPO in the first days of trading, especially if it's well above the offering price.

In general, the IPO market is a long way from healthy. There are estimates that banks will need to raise a lot more money, maybe another $50 billion to satisfy the stress tests the government imposed. That's a lot of investing dollars that won't be available for other stock, including IPOs. Furthermore, investors' appetite for IPOs will only increase if the stocks being offered have solid, profitable histories. Any new companies with an idea and lots of hope need not apply. There are too many stocks already on the market that have proven worthy of investor's funds by making profits and paying dividends.

By the way, that DigitalGlobe issue that traded up 13% on its first day, it traded down by the end of the week, below the initial offering price of $19.

Ted Allrich is the founder of The Online Investor, founder of Allrich Investment Management, LLC, as well as the author of Comfort Zone Investing: Build Wealth and Sleep Well at Night. In this weekly column, he offers advice to investors who are just getting started.