There’s no shortage of high‑profile headlines right now – from SpaceX’s record-breaking IPO to growing concerns around private credit and the rapid rise of prediction markets. In this edition of All That Matters, Mike and Ross answer real client questions and focus on how investors can think clearly when the news cycle feels anything but calm.
Mike: It’s April, the Masters have just wrapped up, and the market feels quiet. That might sound strange given everything happening in the world, but that’s exactly the point. Despite nonstop headlines, the stock market has been largely flat. When markets don’t move the way the news suggests they should, it creates confusion – and that’s usually when questions start rolling in. So this month, we opened the mailbag and tackled what clients are actually asking.
Ross: That disconnect between headlines and markets is uncomfortable for a lot of people. We’re wired to expect big reactions when big things happen. But markets don’t respond to noise – they respond to fundamentals, expectations, and what ultimately affects earnings and inflation. When those factors don’t change dramatically, markets often don’t either, even if the world feels chaotic.
IPO Investing
Mike: One of the most common questions we’re getting right now is about IPO investing – especially with big names like SpaceX and Anthropic potentially setting record‑breaking debuts. The way I think about it always starts with time horizon: how long do you want to own the investment? That single question drives almost everything else. If you believe in a company’s long‑term prospects and it fits your risk tolerance, that can be a reasonable reason to consider it. Where people get into trouble is chasing excitement. Buying an IPO because it’s “hot,” hoping it pops, and planning to sell quickly isn’t investing – it’s speculation. For example, when Meta IPO’d, the stock fell sharply and at one point was down nearly 55% from its initial offering price.
Ross: History backs that up. IPOs are typically younger, riskier companies. In periods when IPOs are especially popular, long‑term returns have often been worse, not better. We saw it during the dot‑com era, and we saw it again with SPACs in 2021. Many companies came public without durable earnings power, and a lot of them struggled afterward. Patience matters. Not every great company has a great first year in the public markets – even one as high‑profile as SpaceX.
Current Thoughts on the Conflict
Mike: Another big question we’re getting is about our current thoughts on the conflict in the Middle East. It’s constantly evolving, and it’s difficult for anyone – regardless of credentials – to predict how it will ultimately unfold. From a market perspective, the key issue isn’t every headline. It’s oil. If major shipping routes are disrupted and oil prices rise sharply, that can feed inflation and push costs higher across the economy. That’s what markets tend to focus on. It’s also important to remember that geopolitical events come and go. History is full of them. Overreacting to each new development can often do more harm than good.
Ross: U.S. markets have actually been quite resilient so far. Corporate earnings have been strong, and stimulus from tax refunds has provided a meaningful boost. As we’ve said before, we’re better insulated than many of our global peers in situations like this. Setting expectations is critical. Markets experience pullbacks regularly, and even a 10% decline isn’t unusual. In fact, average drawdowns are often larger than what we’ve seen recently. Midterm years also tend to be more volatile, and that volatility should be part of the plan – not a reason to abandon it. Prepared investors don’t panic when markets wobble; they recognize it as part of the process.
What’s Worrying Us
Mike: The third and final question we’ve been hearing is: what are you worried about? People are often surprised by this answer, but what worries me most right now isn’t geopolitics – it’s private credit. Illiquid investments can be valuable in the right context, but they come with tradeoffs. When capital is locked up, investors lose flexibility. And while private markets aren’t immune to the same risks that affect public markets, they can be harder to navigate when stress shows up. Illiquidity doesn’t eliminate risk. It just changes how and when you experience it.
Ross: For me, another concern is the growth of prediction markets. They’ve exploded in popularity – from sports to politics to economics. My concern isn’t about any single platform, but about behavior. These markets encourage binary thinking and short‑term outcomes. That’s very different from long‑term investing, which relies on patience, diversification, and compounding over time. If you’re seeing these trends show up in your own decision‑making, or you’re unsure how they fit into your broader financial picture, that’s a great signal to reach out to your Baird Financial Advisor and talk it through before making a move.
This information has been developed by a member of Baird Wealth Solutions Group, a team of wealth management specialists who provide support to Baird Financial Advisor teams. The information offered is provided to you for informational purposes only. Robert W. Baird & Co. Incorporated is not a legal or tax services provider and you are strongly encouraged to seek the advice of the appropriate professional advisors before taking any action. The information reflected on this page are Baird expert opinions today and are subject to change. The information provided here has not taken into consideration the investment goals or needs of any specific investor and investors should not make any investment decisions based solely on this information. Past performance is not a guarantee of future results. All investments have some level of risk, and investors have different time horizons, goals and risk tolerances, so speak to your Baird Financial Advisor before taking action.
