Quarterly Client Letter: 2026 Q2
July 2026
The market continued its climb during the second quarter, gaining about 14% despite persistent concerns about inflation, high energy prices and geopolitical shocks early in the quarter. Yet perhaps the biggest story of all was the long-awaited IPO of SpaceX.
Pre-IPO, Elon Musk promised investors he’d shoot for the stars—literally and figuratively. He painted a picture that includes AI-powered infrastructure, orbital data centers and a million-person colony on Mars.
The story had investors eager to buy in. Shares debuted at $135 before closing the day at $161.11. The surge pushed the company’s value above $2 trillion and made Musk the first trillionaire on paper. Shares later rose above $200 before retreating to about $170 by quarter-end.
One factor behind that volatility was supply. Only about 5% of shares were available to the general public. When share supply is limited, prices can move dramatically in either direction.
The SpaceX IPO may be only the first in a wave of mega-IPOs, with public offerings from AI leaders Anthropic and OpenAI potentially coming hot on its heels. OpenAI has reportedly set its sights on a $1 trillion opening as well, a remarkable prospect for a start-up that is spending aggressively and likely hasn’t yet turned a profit. Recent weakness among tech stocks may delay these offerings, but they will generate huge attention whenever they take place.
Stoking the Fires of FOMO
Stories like these have a way of creating a powerful sense of FOMO—the fear of missing out. When investors see headlines about immense fortunes created overnight, it's natural to wonder whether they should chase the next big opportunity.
Before scrambling for shares in the next big IPO, it’s important to ask a simple question: Why do you invest? Is it for a chance to strike it rich, or is it to maximize the odds of achieving your life goals? As you consider the answer, it may help to distinguish between speculation and long-term investing.
Speculation involves making a bet on a future outcome that will be determined largely by chance or other unknowable factors. The results tend to be binary: either big gains or big losses. Speculation has become wildly popular with the legalization of gambling and predictions markets. The SpaceX IPO valuation also was based on highly speculative thinking. Investors today are making judgments about what the company might become decades from now, based on technologies that don’t exist yet and may not exist for many years, if ever. Could SpaceX become one of the most valuable companies in the world? Possibly. Could it fall far short of its lofty ambitions? That’s possible, too.
For most people, however, the question is academic. They don’t invest to find the next stock that doubles or triples, but to achieve life goals like funding retirement, supporting family members, or leaving a legacy. A diversified portfolio built according to time horizon and risk tolerance gives the best chance of achieving goals like these.
Staying Grounded
Participating in an IPO can be exciting. Some investors choose to dedicate a small portion of their money to speculative opportunities while investing everything else in a portfolio designed to give them the best chance of reaching long-term goals. The key to this approach is to make sure your financial future doesn’t depend on correctly predicting which moonshot succeeds.
There will always be another much-ballyhooed investment. Today, it’s SpaceX. In the future, it may be OpenAI or Anthropic, or even a type of investment that hasn’t been invented yet. Through it all, we will remain focused on building a disciplined portfolio designed to help you achieve your goals, regardless of whichever headlines dominate the moment.
