Benjamin Felix

Excluding IPOs might look really bad over some periods.

I mean, even in the, we'll show the chart for that IPO ETF, there was a period where it was outperforming.

And so if you're excluding IPOs during that period, you're going to look at your decision and be like, man, I was wrong.

But I think you have to think about what is the long-term expected outcome of this thing and then acknowledge that because we're dealing with a ton of uncertainty in financial markets, in the short term, there's going to be a lot of noise.

And you have to be able to stick through whatever you have decided to do through the noise.

And I think that applies to somebody choosing to use dimensional funds.

It applies to somebody using index funds.

It applies right now where people are worried about all these IPOs, but like, man, if you've been investing in index funds, you've been exposed to this exact thing.

And now just because it's a big headline is not a reason to bail on the strategy.

Great.

The last little segment I have here is index funds in private markets.

With companies staying private longer and going public when they're larger, I think it's a natural question to ask whether investors should be seeking exposure to private company shares before the companies go public.

There are a couple of things to think about here.

There's a huge amount of survivorship bias in private company outcomes.

For every SpaceX or OpenAI, which are dominating headlines today, there are thousands of companies that did not grow or failed entirely.

That skewness exists in public markets too, but it's way more brutal in private markets.

It's really easy to look back right now and say, oh, I should have bought SpaceX shares.

You probably couldn't have, but I wish I found a way to get SpaceX.

But there are a ton of private companies that failed over the same period, over the time that SpaceX has been operating and grown to its current size, including other space companies.

It's tough out there.