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The IPO Buzz- What Hopeful Retirees Actually Need to Know · TaylorMade Retirement with Taylor Demars, CFP®

• 0:02
  SPEAKER_02: SpaceX, OpenAI, these and other names have been dominating the headlines.
• 0:07
  SPEAKER_02: The IPO market is heating up and clients are asking questions.
• 0:10
  SPEAKER_02: Today, we're going to keep it simple, but we're going to talk a little bit about the IPO buzz and what retirees might need to know.
• 0:21
  SPEAKER_00: Welcome to Taylor Made Retirement, where we explore what it takes to build a retirement that works for your money and your life with third generation certified financial planner Taylor DeMars.
• 0:36
  SPEAKER_02: Hey everybody, welcome into the podcast.
• 0:38
  SPEAKER_02: This is Taylor Made Retirement with Taylor DeMars, CFP certified financial planner.
• 0:43
  SPEAKER_02: And back with me, finally, I get to uh be back on the podcast and do some content with Taylor.
• 0:49
  SPEAKER_02: So I'm excited to be back, my friend.
• 0:50
  SPEAKER_02: How are you?
• 0:52
  SPEAKER_01: I'm doing well.
• 0:52
  SPEAKER_01: Thank you, Mark.
• 0:53
  SPEAKER_01: Glad to have you back and uh appreciate Ben stepping in for a few episodes.
• 0:57
  SPEAKER_01: And uh good to have you syncing up again.
• 0:59
  SPEAKER_02: Yeah, man.
• 0:59
  SPEAKER_02: I'm glad uh he was able to help out and hopefully did a good job for everybody.
• 1:03
  SPEAKER_02: And uh you enjoyed the content as well with with Taylor and Ben and had a little bit of an accident, but I am I'm I'm on the mend, as the saying goes.
• 1:11
  SPEAKER_02: So I'm glad to be back in the saddle and uh doing some things and working.
• 1:15
  SPEAKER_02: So and this is a cool topic to come back and talk about, Taylor, because it is a little confusing and interesting, right?
• 1:21
  SPEAKER_02: You know, what is an IPO and what do we need to know and understand?
• 1:24
  SPEAKER_02: So I guess for people who don't follow this very closely, can you give us a broad spectrum of you know just the overview of an IPO and and who and what does it benefit?
• 1:33
  SPEAKER_01: Right, right.
• 1:34
  SPEAKER_01: And I'll I'll give the the simplified 101 version because I don't want this to become a textbook episode.
• 1:40
  SPEAKER_01: But and in essence, IPO stands for initial public offering.
• 1:44
  SPEAKER_01: And it's that transformation for when a company that is privately held becomes public.
• 1:50
  SPEAKER_01: And so all the companies that we know and own in the stock market today at some point were privately held, and then we're available for you know everyday Joes and Janes like you and me to be able to buy a portion of ownership.
• 2:02
  SPEAKER_01: So it's exciting because these companies, OpenAI, SpaceX, Anthropic, which does the AI platform of Claude, are some of the biggest names in the headlines for several months now, and they're rumored to be some of the biggest companies in the world when they do IPO.
• 2:18
  SPEAKER_01: So they're creating a lot of buzz.
• 2:20
  SPEAKER_01: And uh when you asked who does it really benefit, uh that's a mixed bag because the biggest people that will benefit are those who currently own, obviously the the company, because when it comes out to the public market, there's a lot of demand that is unleashed and you know, supply and demand, there's only so much supply.
• 2:39
  SPEAKER_01: So that may make the company, though those those owners, current owners, have much more value, much more uh wealth built because of it.
• 2:47
  SPEAKER_01: And of course, we'll probably get to that in a minute, but it's anyone's guess as far as where the value of the stock will go from there.
• 2:54
  SPEAKER_02: Okay.
• 2:55
  SPEAKER_02: Yeah, and to that point, Taylor, right?
• 2:56
  SPEAKER_02: So the reason we're talking about this, and we're we're dropping this podcast, we're taping this uh early in the week in June of the week that it's coming out.
• 3:02
  SPEAKER_02: So we're gonna drop the podcast the day before uh SpaceX specifically becomes available on the exchange uh to purpose purchase, which is gonna be Friday, June the 12th.
• 3:11
  SPEAKER_02: So you could be catching this after, you could catch it right when on Thursday when we dropped this, whatever the case might be.
• 3:16
  SPEAKER_02: Uh, but either way, it's it's got the buzz going on.
• 3:19
  SPEAKER_02: Uh and you know, there's a saying that a great company and a great investment aren't always the same thing, right?
• 3:24
  SPEAKER_02: And so when you look at some basics on this, as I mentioned, it's coming out June 12th, Taylor.
• 3:28
  SPEAKER_02: The tick uh the ticker's gonna be SPCX.
• 3:31
  SPEAKER_02: They're kind of saying that they think it's gonna be about$135 per share, uh, and the valuation at about$1.75 trillion.
• 3:39
  SPEAKER_02: Uh so it can be interesting.
• 3:41
  SPEAKER_02: And that's exciting because people think, well, maybe I should get in on that, right?
• 3:44
  SPEAKER_02: So there's what are some things to kind of think about?
• 3:46
  SPEAKER_01: Yeah.
• 3:47
  SPEAKER_01: And there's a principle that doesn't apply just to an IPO, but any stock at any time, which in my opinion is that the stock is a representation of people's expectations.
• 3:56
  SPEAKER_01: Okay.
• 3:56
  SPEAKER_01: Right.
• 3:57
  SPEAKER_01: Not necessarily reality.
• 3:58
  SPEAKER_01: And so when you see the stock market whips up and down several percentage points in a day, it's not necessarily something has inherently gone wrong with all those companies.
• 4:07
  SPEAKER_01: It's just people's expectations.
• 4:09
  SPEAKER_01: Maybe a jobs report came out or something with in inflation came out that makes people change their expectations.
• 4:14
  SPEAKER_01: So when we talk about call it SpaceX specifically, it's a you know very powerful company.
• 4:19
  SPEAKER_01: It's sending some of the biggest rockets in history into space.
• 4:22
  SPEAKER_01: Uh it's got its Starlink internet network that could, you know, transform how the world gets connected.
• 4:28
  SPEAKER_01: And those are some really high expectations that SpaceX I I think will fulfill.
• 4:34
  SPEAKER_01: But in order for a stock to go higher, it needs to not just clear the bar, but raise the bar and then clear it even at that point.
• 4:42
  SPEAKER_01: And so that's the catch, the catch 22, right?
• 4:46
  SPEAKER_01: Is that these these companies that we're talking about have already changed the world, but for the stock to climb from here, it has to keep outrunning the story that's already wildly optimistic with fresh breakthroughs, fresh innovations, and even better numbers than people expect here in June 2026.
• 5:02
  SPEAKER_02: Okay.
• 5:02
  SPEAKER_02: Uh, for a client who's retirement focused, how does that conversation about IPOs or exposure uh go?
• 5:09
  SPEAKER_02: Do they belong in portfolios for retirees?
• 5:12
  SPEAKER_02: Is it, you know, obviously person to person, which seems to make more sense to me, kind of specific, or what?
• 5:16
  SPEAKER_01: Yeah, that's a great question.
• 5:17
  SPEAKER_01: You know, interestingly, we'll see how this these these IPOs get absorbed into the SP 500.
• 5:23
  SPEAKER_01: Sometimes there are rules about how long the uh a company that is IPO'd can take until it's eligible to be inside of some of these broad market indexes, because uh eventually they will be, and I think sooner than later.
• 5:35
  SPEAKER_01: And so essentially everyone will, I think, own a piece of these major companies, OpenAI, SpaceX, Anthropic, et cetera, just by the nature of they're gonna be some of the most valuable companies in the world.
• 5:46
  SPEAKER_01: And when you buy, you know, the SP 500 or broad market indexes, chances are you're gonna own a portion of them.
• 5:53
  SPEAKER_01: So at that point, it's a question of not only are you gonna own them already some of it, but should you be so specific as to buy just that stock and and and double double down on it?
• 6:02
  SPEAKER_01: And of course, here on a podcast where we don't know the situation of each individual listener, it's too hard to tell.
• 6:08
  SPEAKER_01: But when it comes to a retirement portfolio, as the saying goes, you want to concentrate your wealth in order to grow it, and then you want to diversify your wealth to preserve it.
• 6:18
  SPEAKER_01: So we're no longer in the phase of trying to accumulate, accumulate.
• 6:22
  SPEAKER_01: We're trying to make sure that we keep our chips on the table or even take chips off the table rather than trying to roll the die and make sure that we can, you know, win the next bet.
• 6:30
  SPEAKER_01: I wouldn't say that means that we are are inherently opposed to buying these IPOs, but we're very cautious and skeptical about adding or doubling down, I should say, on some of these positions when we feel like we've already hopefully won the game by the time we are in retirement.
• 6:47
  SPEAKER_01: Does that make sense?
• 6:48
  SPEAKER_02: Yeah, no, definitely.
• 6:49
  SPEAKER_02: I was gonna ask you like what's the what's a phone call or a conversation look like with a current client who maybe expresses interest, and you kind of covered that right there.
• 6:57
  SPEAKER_02: Uh and really volatility, right?
• 6:59
  SPEAKER_02: So to uh quote Yahoo Finance, just so we have our resources here uh listed on this, uh, or cite our sources here, uh they say because of extremely high demand and relatively small initial float of shares, early stock price movements are expected to highly uh be volatile.
• 7:14
  SPEAKER_02: And I think sometimes people think they don't realize if they've never done this before, Taylor, you could buy it at the 135, let's say that's what the uh you know it pops out at, but it it may swing wildly those first couple hours, right?
• 7:25
  SPEAKER_02: So you have to also be comfortable with that.
• 7:28
  SPEAKER_02: You can't think, oh, I'm gonna get in for 135 and then maybe be upset by the end of the day if it dropped, you know, considerably amount because that that's that's the risk, that's the volatility.
• 7:37
  SPEAKER_01: Yeah, there's there's so many factors that are going into this, you know, situation.
• 7:41
  SPEAKER_01: So it's hard to tell what it where the momentum is truly gonna go.
• 7:44
  SPEAKER_01: But you also have to think about, as mentioned earlier, who's this is really benefiting are people who currently own the stock and or I should say own part portions of the company but have been really illiquid, right?
• 7:55
  SPEAKER_01: It's kind of like only owning a whole bunch of gold bars in your basement.
• 7:58
  SPEAKER_01: And you may feel wealthy, but you know, you can't go down to Kroger and say, hey, take my gold bar for some money.
• 8:03
  SPEAKER_02: Well, you can shave a little something off and get you some bread, maybe, but you know, that's a pretty apocalyptic scenario.
• 8:08
  SPEAKER_01: Right.
• 8:08
  SPEAKER_01: But uh but yes, to your point, it's like these people aren't able to really use their wealth.
• 8:14
  SPEAKER_01: So this IPO is an attractive opportunity for many of them to say, well, now it's publicly available, I can sell it.
• 8:20
  SPEAKER_01: There are certain restrictions on how much they can sell at certain times, but all the same, the risk is you get in at the IPO, and there's many people trying to get out of the doors, as many people are trying to get in the doors.
• 8:30
  SPEAKER_01: And that's where, yeah, you'd see some volatility that people are finally able to unlock maybe seven figures of wealth that they're saying, hey, I I have a lot of money.
• 8:38
  SPEAKER_01: I don't want it all to be in SpaceX's basket.
• 8:40
  SPEAKER_01: I want to spread my eggs here.
• 8:41
  SPEAKER_01: And so that's the risk is some people are trying to run out of the, you know, the SpaceX building, if you will, as many people are trying to get in.
• 8:48
  SPEAKER_01: And and so I don't pretend to have a crystal ball, at least that works, to tell people, hey, what's the right time to get in?
• 8:54
  SPEAKER_01: But if people have so much FOMO, fear of missing out, that they have to get in, yeah, that that that's totally on the table.
• 9:01
  SPEAKER_01: We like to joke that, you know, let's set aside a portion of your portfolio to call it be it your cowboy fund.
• 9:07
  SPEAKER_02: Yeah, be responsible, right?
• 9:08
  SPEAKER_01: Right, right.
• 9:09
  SPEAKER_01: And and and that number could look like a different amount for each person, maybe as much as five percent of your total portfolio to and not just in SpaceX, but you know, your cowboy fund to say this is this is a uh this is not a uh you know pennies worth of your portfolio.
• 9:24
  SPEAKER_01: But if it does well, right, if it doubles, heaven forbid, if uh from five to percent to being 10%, we're talking some real benefit to your portfolio.
• 9:33
  SPEAKER_01: Yeah, but at the same point, if 5% goes to nothing, then you know, it's not like we're going to eating can tuna and ramen in retirement suddenly.
• 9:40
  SPEAKER_01: So that's that's kind of tuna's kind of expensive lately.
• 9:43
  SPEAKER_01: So uh pick your poison.
• 9:46
  SPEAKER_02: Yeah, exactly.
• 9:46
  SPEAKER_02: You know, it's so like my brother was joking, he was like with me, he was like, well, 10 shares is you know, if it goes at the right thing, it's only 1300 bucks.
• 9:53
  SPEAKER_02: And I was like, he's like, this makes me feel good, like I got something.
• 9:55
  SPEAKER_02: I was like, well, there you go, right?
• 9:57
  SPEAKER_02: As long as you can afford it, but just be safe, right?
• 9:59
  SPEAKER_02: And again, so and he's uh he's retired.
• 10:01
  SPEAKER_02: So, you know, again, as a retiree or pre-retiree, you always want to make sure uh that you know you're you're not gambling, right?
• 10:07
  SPEAKER_02: You want to have that structured plan in place.
• 10:09
  SPEAKER_02: And for many people, if they're already working with you, they do have that in place.
• 10:12
  SPEAKER_02: If they're they're just getting started or they haven't reached out to you yet, you know, all those things are something to consider.
• 10:17
  SPEAKER_02: And again, this is happening tomorrow.
• 10:19
  SPEAKER_02: So if you decide to do something, just be responsible, right?
• 10:22
  SPEAKER_02: Don't go over the edge.
• 10:23
  SPEAKER_02: And then, of course, as always, you know, talk with a qualified professional at the end of the day.
• 10:27
  SPEAKER_02: The excitement around a big IPO, Taylor, it's real and sometimes just even justified.
• 10:31
  SPEAKER_02: But enthusiasm can, you know, sometimes get the better of us.
• 10:34
  SPEAKER_02: So let's just be smart.
• 10:35
  SPEAKER_02: And again, if you guys need help, got questions, reach out to Taylor and his team.
• 10:39
  SPEAKER_02: Uh, you can certainly do that at DemarsFinancial.com.
• 10:42
  SPEAKER_02: Click on the could we be a fit if you are not working with them button.
• 10:45
  SPEAKER_02: Uh that's a good way to get started.
• 10:46
  SPEAKER_02: Demarsfinancial.com.
• 10:48
  SPEAKER_02: If you are and you're considering this and you haven't talked to Taylor and his team yet, you haven't reached out to the office, please do so this week, right?
• 10:55
  SPEAKER_02: So just give them a jingle of reach out to him.
• 10:57
  SPEAKER_01: Any other thoughts as we wrap up?
• 10:58
  SPEAKER_01: Yeah, I guess just in closing, it's uh as tempting as a sexy as an opportunity as this is, you know, you were you were citing sources earlier.
• 11:05
  SPEAKER_01: I found a stat that said going back to 1926, only 4% of the total stocks in the stock market drove nearly all the net wealth that the market has ever created.
• 11:15
  SPEAKER_01: So if you're trying to, you know, hit a dart on the board to get you know just the right 4% of stocks, it's a really hard uh thing to achieve.
• 11:23
  SPEAKER_01: And you know, maybe these three companies we're talking about are one of them, maybe not.
• 11:27
  SPEAKER_01: But at the end of the day, we feel that a good retirement plan doesn't have to swing for a home run, but instead aiming to avoid the strikeouts that could take us out of the ballgame altogether.
• 11:38
  SPEAKER_01: Well, that's that's what a good plan is in our book.
• 11:40
  SPEAKER_02: Since you're going stats, you know, the the home run leaders are often the strikeout kings too, right?
• 11:45
  SPEAKER_02: True in every season, right?
• 11:46
  SPEAKER_02: Because they're swinging for the fences, but they often strike out more than they hit home runs.
• 11:50
  SPEAKER_02: So that is a good analogy and a good way to wrap it up.
• 11:52
  SPEAKER_02: If you need some help, get that retirement readiness roadmap.
• 11:55
  SPEAKER_02: Again, with Taylor and the team, go to demarsfinancial.com.
• 11:58
  SPEAKER_02: That's demarsfinancial.com.
• 12:01
  SPEAKER_02: And don't forget to subscribe to us on Apple or Spotify, or check out Taylor's YouTube channel as well.
• 12:06
  SPEAKER_02: All that information is right there on the website.
• 12:08
  SPEAKER_02: And we'll see you next time here on Taylor Made Retirement with Taylor Demars.