Clients have been asking me whether or how they should think about investing in SpaceX.
Here’s what I tell them.
You may already own it. You probably will soon if you don’t.
I’m not Gordon Gekko. I don’t have special insight into how SpaceX or any other publicly listed company is going to do over the next few years.
Neither do hedge fund managers or big asset managers with hundreds of analysts focused on answering this question (despite what their marketing teams want you to believe). Large cap passive indexing beats the vast majority of professional active managers. 88.3% of them over a 15-year period according to S&P’s SPIVA report.
SpaceX has already been incorporated into the Nasdaq 100 index. If you own a fund that tracks the index, you already own SpaceX.
SpaceX could get incorporated into the S&P 500 index as soon as June 2027 if it meets certain hurdles.
Sometimes the follow-up in this conversation goes like this.
What if I can’t wait or really want it now?
If you absolutely can’t wait for it to get added to an index you don’t already own then you could add a small position now that represents it’s weight in your chosen index as if it were already incorporated.
Sizing a small position to match SpaceX’s eventual index weight is just indexing a little early. You’re not trying to outguess the market. You’re letting the market’s own weighting decide the size for you.
If you like thinking about investing and portfolio construction, check out some of these other posts:
- Why This Executive’s $2.9m Portfolio Was Underperforming
- Why is it important to benchmark your portfolio?
- When Should You Sell a Concentrated Stock Position?
Or feel free to reach out to me directly at [email protected] if you want someone to help you think through how to optimize your portfolio strategy.
Nathan
Founder & Lead Advisor
Kangpan & Co. is a flat-fee financial advisory firm specializing in helping mid-career professionals navigate the career, family, and financial tradeoffs that come with this stage of life. This content is for educational purposes only and is not financial, legal, or tax advice. Consult a licensed advisor for help with your individual situation. Employees and clients of Kangpan & Co. may hold positions discussed in our content. Past performance is no guarantee of future results.