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Selling a stock at a profit is supposed to feel like a win. Allen Tran booked the profit, but he still feels like he ran at a loss.
Tran, a 28-year-old who runs the investing community HaiKhuu Trading, bought SpaceX shares on the Friday they started trading, sold them the same afternoon and walked away with a small five-figure gain. Then, the stock kept going up. He now estimates he left about $60,000 on the table by not holding.
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“I would much rather have done nothing and made more,” he told The Wall Street Journal (1). “I don’t think anyone expected SpaceX to rally like this.”
It’s not just him who feels this way. In trading group chats, according to Tran, people are regretting they never bought a single share. “We all feel like idiots for not trying to buy it at $135,” Tran said, naming the IPO price.
But looking back, Tran might have saved a lot of money by liquidating his position when he did.
How fast the stock actually moved
SpaceX (NASDAQ: SPCX) went public on June 12 priced at $135 a share (2) — making it the largest IPO on record, raising about $86 billion (3). Regular investors could request shares before the debut through brokerages like Fidelity and Robinhood, and plenty did.
The first full day, it closed around $161, up roughly 19% (2).
By the next Tuesday (June 16), the stock was up nearly 50% from its offer price, and a 4.8% pop that day pushed SpaceX past Amazon to become the world’s fifth-largest public company by market value (1). The jump came after SpaceX announced that it would buy AI-coding startup Cursor for $60 billion in stock (4).
Among IPOs that raised more than $10 billion, it’s one of the best three-day starts on record — only Rivian did better, according to FactSet data cited by Wall Street Journal (5).
But SpaceX’s downfall has been just as dramatic. After hitting an all-time high of $225.64 on June 16, SpaceX has been steadily losing momentum, and it is down over 31% to $154.54 as of June 24 (8).
What this means for your money
Before you treat a hot IPO like easy money, here’s what you should know. Many brokerages don’t like it when you flip IPO shares quickly. Fidelity, for example, won’t let investors who sell within the first 15 trading days join future offerings (6).
In other words, that trade that feels smart this time can actually lock you out of the next one.
Additionally, a brand-new stock has almost no trading history, with not many shares changing hands. That’s what makes the price jump up and down wildly, meaning that a stock that climbs nearly 50% in three days can fall just as fast.
It’s also worth noting that IPOs typically have a lock-up period that keeps insiders from selling for the first few months (7). And once that lock-up period ends, all those new shares can flood the market and pull the price down regardless of how well the company is doing.
Don’t chase every market hype
Looking back, the “Musk premium” seems to have given early retail investors a reason to celebrate when SpaceX finally made its public debut. As such, those who managed to buy in at the IPO price of $135 were briefly sitting on impressive gains as excitement around the company pushed shares higher.
But the market excitement faded just as quickly as it appeared.
Within less than two weeks, much of that upside had disappeared. Investors who bought SpaceX shares simply because of the hype — and held on expecting the momentum to continue — quickly saw their gains disappear almost completely.
The lesson? Hype can create opportunities — but it can also create expensive mistakes.
Buying a stock just because it’s trending or dominating conversations can leave you exposed when sentiment shifts. Instead, you might be better off looking for companies with strong financials, healthy growth prospects and reasonable valuations.
Of course, it isn’t as easy as it seems.
Finding value stocks at bargain prices involves doing research. From tracking company earnings to understanding broader economic trends, finding quality investments takes time and effort.
Get expert advice
For investors who want help sorting through the noise, platforms like Moby can help by offering expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts
Moby’s success speaks for itself. In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.
Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts and can help you reduce the guesswork behind choosing stocks and ETFs.
Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.
Stick to index funds
Instead of trying to predict the next big market winner, you might want to consider a more practical and consistent approach — investing in a broad index fund that tracks the S&P 500.
Rather than betting on one company, an S&P 500 index spreads your money across hundreds of America’s largest businesses in different industries. That diversification can help reduce the risk that comes with relying on a single stock’s performance.
It’s a strategy that investing legends like Warren Buffett have supported.
“The trick is not to pick the right company,” Buffett once claimed, adding, “The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently (9).”
Buffett actually puts his money where his mouth is. He has even instructed that after his death, 90% of the inheritance left for his wife should go into a low-cost S&P 500 index fund (10).
Get started with as little as $5
The beauty of this investment strategy is you don’t need to have wealth similar to Buffett’s in order to implement it into your own financial plan. In fact, you can start by investing spare change from everyday purchases into a low-cost index ETF.
For example, platforms like Acorns let you invest your spare change from everyday purchases into a diversified portfolio of ETFs.
Signing up for Acorns takes just minutes: All you have to do is link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio managed by experts at leading investment firms like Vanguard and BlackRock.
With Acorns, you can invest in an S&P 500 ETF with as little as $5 — and, if you sign up today, Acorns will add a $20 bonus to help you begin your investment journey.
Keep trading costs low
While nobody can predict exactly when a stock will rise or fall, you can make sure fees aren’t working against you. Trading costs may seem like a minor detail, but over a decades-long investing horizon, even small expenses can compound into thousands of dollars in lost growth. That’s why it’s a good idea to think about which kind of investment platform is best for you.
For example, platforms like Robinhood are designed to make investing simpler and more approachable.
If you prefer a more hands-on approach, you can also buy and sell individual stocks, fractional shares and options (for qualified traders) — backed by 24/7 support. Stocks, ETFs and their options trades are commission-free.
With access to popular ETFs like the Vanguard S&P 500, you can build diversified exposure without needing to pick individual stocks.
The platform also offers both a traditional IRA and a Roth IRA, so you can choose the tax strategy that fits your retirement plan.
With its recurring investment feature, you can set up automatic investments of your preferred fractional shares, stocks and ETFs on your own schedule.
Over time, this helps make investing a habit and steadily grows your portfolio.
Diversify with a safe haven asset
Ultimately, the decline in SpaceX shares did not come entirely out of thin air. Concerns about the company’s valuation had been building weeks before its public debut, and broader market conditions have only added pressure.
Chief among those pressures is the recent global tech rout. That, coupled with the Fed’s decision earlier in June to hold interest rates steady — thanks to inflation hitting a three-year high last month — makes it clear that the market is highly volatile.
Amid this tumultuous market backdrop, consider hedging your portfolio by investing in assets that can behave differently when stocks are under pressure. Gold has historically played that role, typically serving as a hedge during periods of uncertainty and market turbulence.
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Priority Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty.
To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The Wall Street Journal (1),(5); CNBC (2),(4),(9); The Straits Times (3); Fidelity Investments (6); Investopedia (7); Yahoo Finance (8); Berkshire Hathaway (10)
— With files from Godwin Oluponmile
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.