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mattbrewsbytes 2 days ago

It might be a good idea to move to entire market index funds (VTI for example) for a few months around these IPOs to minimize the blast radius to your portfolio which still includes them in case of massive upside. If there is a downturn in the markets, its also a great time to be buying in, so keep up those contributions.

A major reason for the waiting period before being added to indices is to see 4 quarters of results, accounting practices, and all the fine print on those SEC filings. All sorts of other ETFs and mutual funds index off the indexes so the market will not have the waiting time to ascertain if these companies balance sheets and accounting practices are filled with bullshit.

Is it possible that one of these IPO's would be like a Global Crossing or Enron having an IPO during the dot com timeframe and would being auto-included into indexes be a good idea? Certainly not. I'm not claiming any of these companies are cooking their books or committing fraud, etc. only pointing out that there was a reason for the waiting period and part of that reason is seeing results held up to accounting standards.