By: Sanjoy Ghosh, Chief Investment Officer, Interactive Advisors
The Interactive Advisors Broad Market portfolio follows a clear, rules-based game plan built around three big ideas: spreading out risk, keeping things steady, and growing value over the long haul. With that in mind, here’s why skipping the upcoming SpaceX IPO is a smart move.
1. We’re All About Spreading the Risk Around
Think of our portfolio like a well-balanced meal—a little of everything, so you’re never relying on just one thing. The Broad Market portfolio spreads your money across lots of different investments using a blend of equal-weight and market-weight approaches.
A big, buzzy IPO like SpaceX could tip that balance. New stocks tend to bounce around wildly in their first days of trading, and nobody really knows which way they’ll go. That kind of rollercoaster ride doesn’t fit with our goal of steady, dependable returns.
2. Playing the Long Game, Not the Quick Win
We’re focused on building value over time, not scoring fast (and risky) wins. The Broad Market portfolio is filled with companies that have proven themselves and shown steady growth.
SpaceX is an exciting, innovative company—no doubt about it. But it’s still growing and hasn’t yet shown consistent profits. Buying in at the IPO stage means a lot of unknowns about whether it can deliver reliable returns down the road. We’d rather stick with companies that have a solid track record.
3. Matching Our Clients’ Comfort Levels
Different investors have different comfort levels with risk, and our clients choose portfolios that suit theirs. For many people—especially those who lean cautious—an IPO is simply too risky. By passing on the SpaceX IPO, we keep the portfolio in line with what our clients signed up for.
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VIA SHUTTERSTOCK
DISCLOSURES:
Covestor Ltd, also known and doing business as Interactive Advisors, is an Interactive Brokers Group Company. It is an investment advisor registered with and regulated by the Securities and Exchange Commission under the Investment Advisers Act of 1940. Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC. Interactive Advisors is not registered in any jurisdiction outside the United States. This website is for informational purposes only and is not intended to be a solicitation or advertisement in any jurisdiction other than the United States. See important Terms of Use and our Privacy Policy Notice on our Forms and Agreements page.
Nothing in this article should be construed as a solicitation or offer or recommendation to buy or sell any security or as an attempt to provide any investment advice. Investment advice is only provided to investors who become clients pursuant to an investment management agreement. The content of this page is offered for informational purposes only, does not constitute investment advice, and is not an offer to buy or sell any security or invest in any of our portfolios.
Past performance is no guarantee of future results, nor is it indicative of future performance. All investments in financial markets involve risk, including the risk of loss, such as a loss of principal and reduction in earnings.
The Broad Market portfolio was launched on Interactive Advisors on November 03, 2016. On that date, Interactive Advisors started trading its own funds in a brokerage account trading this strategy. This portfolio was opened to client investments on November 03, 2016. All performance information on this page is actual performance of the Interactive Advisors proprietary account and presented “net of fees”. The actual performance chart is provided for informational purposes only, and should not be used as the basis for making an investment decision. Actual client returns will differ.
