Connecting What’s Happening to What Really Matters
The financial headlines have been filled with speculation about high-profile companies like SpaceX, OpenAI, and Anthropic going public, all while the stock market continues to reach new highs. In this month’s Beyond the Headlines segment, we explore why investors should be cautious about chasing the latest market excitement and how a disciplined, long-term approach can help support financial success.
We’ll consider the challenges and risks of investing in highly anticipated IPOs, the importance of diversification, and what history tells us about investing during periods of market strength. We also share why trying to predict market corrections is rarely productive and how staying invested often delivers better outcomes than waiting for the “perfect” opportunity. Finally, we highlight the value of ongoing advisor education and personalized guidance.
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The headlines lately have been hard to miss. Some of the most talked-about private companies in the world may be going public, and the stock market keeps setting new records. Here’s how we are thinking about the current market landscape, and what it means for you.
There’s been a lot of excitement around possible IPOs from companies like SpaceX, OpenAI, and Anthropic. When companies get this much attention, wanting a piece for yourself is a completely natural reaction.
For most investors, getting in before a company goes public is very hard. And once it does hit the open market, the price is often inflated and wildly volatile. Remember, for every Tesla or Nvidia, there's WeWork and Pets.com, reminding us that there’s no such thing as a sure thing.
We don’t chase hot, short-term trends that could fizzle at any moment. Instead, we build around the fundamentals of an investment with a diversified portfolio giving you exposure across U.S. and international companies, designed to carry you through full market cycles.
Then there’s the market itself, which has been climbing to all-time highs. For some people, that brings fear of the next correction. But the market’s history gives us reason not to be fearful.
There are certainly reasons for caution about markets today, but recent market highs are not among them. In fact, average US stock market returns after all-time highs have been about average historically, and since 1928, the total return of the S&P 500 has been positive 68% of the time one year after a new market high, and 79% of the time five years later.
Of course, the market will pull back at some point. It always does. But you can never know the size or timing, which is why we prepare for volatility instead of trying to predict it. Waiting on the sidelines for the perfect dip can cost more than it ever saves. Staying invested with a long term plan is what keeps you on track.
We know good planning doesn't happen on its own. Tax law shifts, markets turn, and your life changes. So we invest in our team's ongoing education and credentials to keep their knowledge current with the decisions you're facing. That expertise, paired with advisors who know your full financial picture, is what lets us give you steady guidance when the headlines get loud.
When you see the next big IPO or the next record close in the headlines, don’t change your approach or goals. Stay diversified, keep a long-term time horizon, and trust your plan. And as always, the team at Foster & Motley will keep helping you focus on what really matters.