The next great wave of public companies may soon arrive on Wall Street. SpaceX is expected to go public in the next month or two, and OpenAI and Anthropic are waiting in the wings to pursue public offerings shortly thereafter. All of them will potentially be valued in the trillions, with SpaceX estimated to be worth as much as $1.75T. If those expectations become reality, these companies could quickly become meaningful holdings in many index funds and ETFs that millions of investors already own.
That is important because most broad market index funds are weighted by market capitalization. In simple terms, the larger a company becomes, the larger its position in indexes such as the S&P 500 or Nasdaq 100. Analysts already expect index providers and passive funds to adapt quickly to include these mega-IPOs.
For investors, this creates both opportunity and risk. Overall, it is a good thing that more companies are going public. Retail investors can gain exposure to innovative companies and can do so automatically through diversified funds without needing to buy shares directly. On the other hand, history suggests caution when enthusiasm surrounding an IPO becomes excessive.
Research on past IPOs has not been encouraging. A recent Reuters analysis found that the 50 largest IPOs of the past five years significantly underperformed the broader stock market after going public. Those IPOs returned an average of 27%, while the S&P 500 gained 53% during the same period. Other studies have shown that new public companies often lag the market over longer periods as early excitement fades and lofty expectations collide with business realities.
That does not mean companies like SpaceX, OpenAI, or Anthropic cannot become successful long-term investments. Some IPOs eventually evolve into dominant global businesses. Amazon, Google/Alphabet, and Facebook/Meta all had their IPOs since 1997, and all three are in the top ten in stock market size. But investors should remember that innovation and investment returns are not always the same thing. Great companies can still become disappointing stocks if purchased at unrealistic prices.
For most long-term investors, maintaining diversified exposure through disciplined portfolio construction may prove wiser than chasing the excitement of a high-profile IPO. Sometimes the best way to participate in the future is patiently and broadly, rather than emotionally.
Food Inflation May Get Worse: We have seen large increases at the gas pump, but up next may be food. A combination of El Niño bad weather, tariffs, smaller herds, fertilizer prices, and increases in transportation costs from the Iran conflict could push food prices much higher in the coming months. The latest USDA food price outlook projects an increase of food costs of 3.2%, but some experts believe the increase to be closer to 4% or 5% by year-end. Yahoo Finance
Financial Planning/Investment Strategy Corner:
Protecting Your “Priceless” Art: We have recently been looking at paintings to hang over our fireplace. We loved the one that has hung there for more than twenty-five years, but we are worried that smoke and heat from the fireplace could eventually damage our beloved “priceless” piece - at least priceless to us. But considering buying another painting got me thinking about how to protect art, and the art of many of our clients who own and often discuss their art with us.
Many people assume that their homeowners' insurance fully protects their collections. In reality, standard policies often provide only limited coverage for artwork, and those limits can fall well short of the true value of the collection. Even collections that are not museum quality can become valuable over time. A handful of paintings, sculptures, or photographs accumulated over decades can easily exceed $50,000 or $100,000. Unfortunately, many have not taken the steps to protect those collections.
Collectors should begin by creating a detailed inventory that includes photographs of the art, artist names, dimensions, purchase dates, receipts, and any proof of provenance. For higher-value collections, a professional appraisal every five or ten years can help establish current market value and ensure insurance coverage keeps pace with appreciation. Specialized Personal Articles, Personal Properties, or standalone fine art insurance policies often provide broader and better protection than traditional homeowner's policies. These policies may cover accidental damage, theft, transit, and restoration costs that standard coverage excludes.
Protection goes beyond insurance as well. Artwork should be safeguarded from direct sunlight, humidity, smoke, and excessive heat, all of which can quietly damage pieces over time (should I reconsider hanging paintings over our fireplace?). Experts also caution against cleaning paintings themselves, as improper cleaning can permanently damage both the art and its value.
For many families, art collections are personal, emotional, and often deeply tied to memories and experiences. But they can also be valuable and need protection. Taking a few thoughtful steps to document, insure, and properly care for those collections can help preserve those family heirlooms for years to come.
State Farm - How to Appraise and Insure Collectibles
Ask an Art Appraiser: Heidi Lee Komaromi
Appraisers Association of America
Smithsonian Museum Conservation Institute – Caring for Your Paintings
Quick Hits:
- 6 Lyrics retirees should live by, coming from that great, renowned retirement sage, Ozzy Osbourne: Kiplinger
- Seems like there is still much to learn about GLP-1 weight-loss drugs. They may have a side effect in stalling the progression of cancer: WSJ
- And GLP-1 drugs may also cause rapid muscle loss and make people frail: WSJ
- Kindness has a multiplier effect. One act of kindness is multiplied: Axios
- Dancing as you age is a great way to stay fit, while also working on your strength and balance: AP News
Waking Up in the Middle of the Night May Be Natural: I often wake up in the middle of the night and then spend an hour or two reading before finally being able to fall back asleep. It’s easy to assume something is wrong with my sleep, but it turns out that for much of human history, being awake for a couple of hours at night was completely normal. Historians and sleep researchers have documented that people commonly slept in two segments called “first sleep” and “second sleep” with a quiet period of being awake in between. During that short awake time, people would read, pray, talk, reflect, check on animals, or even tend to a fire, before returning to bed. Some researchers believe the Industrial Revolution, with artificial lighting and rigid work schedules, pushed society toward the expectation of uninterrupted seven or eight hours of sleep. This does not mean chronic insomnia should be ignored, but it may offer reassurance to those of us who occasionally are up in the middle of the night. Maybe we are simply remembering our historic rhythms of sleep.
The Conversation Cambridge University Press
Quotes About Sleep:
“The best bridge between despair and hope is a good night’s sleep.” E. Joseph Cossman, inventor and businessman
“I love sleep. My life has a tendency to fall apart when I’m awake, you know?” Anonymous
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