S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic
*Not a financial advise, and my personal opinion, not of my employer
Just came across this article about S&P 500 rejecting SpaceX, also blocking entry for OpenAI and Anthropic. I was concerned about this and have been actively looking into moving away from VTSAX and similar funds into funds such as FLCOX that are less impacted by tech companies.
My thinking is simple, and would love to hear if I'm thinking about it incorrectly: to get into S&P500 the companies have to have solid fundamentals for a period of time, and those fundamentals only make you eligible. A committee still has to decide whether the company should be added to the fund.
The fact that these companies, with no public accounting records, are trying to get into the fund upon going public immediately is a huge risk to all of our retirement accounts. IPOs tend to have a huge price hike at launch, and then as the prices even out, people more often than not lose 10-20% if not more. Figma stock price was down almost 40% after the IPO, for instance.
Again, happy about this. Right move. Glad to see that some common sense still exists in the stock market.