Our Chief Trader's take on the historic incoming IPOs... Don't fall for this old wives' tale... Selling gold for the first time since 2024

SpaceX and OpenAI are both getting ready to IPO.

These will be historic events for the stock market. SpaceX will be the biggest public debut in history. We’ll have a lot to say about it leading up to its IPO, which is expected in June.

Today, I (Chris Reilly) want to zero in on a specific question: Should you buy SpaceX on “Day 1” when it IPOs?

I asked RiskHedge Chief Trader Justin Spittler. If you’re a longtime RiskHedge reader, you know Justin ran our successful IPO Insider service from 2019–2022. Although we closed the service when IPO activity dried up, Justin has tracked more IPOs than anyone I know.

Here’s his take on SpaceX on “Day 1”:

Intrigued, but not overly bullish.

He flagged the lockup structure, which is something most retail investors don't think about. In short, investors who owned SpaceX while it was private cannot necessarily “cash out” the day it goes public due to lockup restrictions. They will likely have to wait six months to sell.

That means the stock may come under pressure around six months after its IPO, giving long-term investors a potentially better entry price.

That said, Justin fully expects the retail frenzy to carry the stock out of the gate regardless. "I think there's going to be so much retail excitement," he told me.

• Justin’s far more skeptical about artificial intelligence (AI) giant OpenAI.

OpenAI’s IPO timeline is fuzzier. Recent rumors suggest it will be pushed back to 2027.

He said it sounds like “exit liquidity”—i.e., the IPO is best for founders and early investors who want to cash out, and not necessarily for the company.

Justin’s take is that an OpenAI IPO could actually mark a sentiment peak for the broader AI trade—insiders cashing out at the top while retail rushes in. He's not interested.

For IPOs in general, Justin's approach is to let the stock breathe first.

"A lot of times, it's best to just wait," he said, "until it becomes easier to manage risk. It’s hard to manage risk on a stock that’s been trading for 15 minutes."

If you want to get Justin’s real-time trade alerts, I'll have more on that soon. He’s been crushing it this year.

Moving on...

• Don't fall for this old wives' tale.

"Sell in May and go away."

You've probably heard this old Wall Street saying before.

The theory is simple: Stocks tend to rise in the fall and winter… and struggle in the spring and summer. So just cash out in May and come back in the fall.

Sounds simple enough. But is it actually true?

More than 90 years of historical data says not really.

May is the third worst month historically. But the May–July stretch is pretty strong. July is actually the top-performing month of the year!

Take a look:

In other words, investors who follow "sell in May and go away" are leaving money on the table more often than not.

Now, averages aren't gospel. Stocks can and do defy them. Back in 2002, the S&P 500 fell 15% from May through July. But in 2020, if you sold in May, you missed a 15% rebound off the COVID crash lows.

So use this data as a guidepost. And don't let a catchy old saying talk you out of staying invested. Finally...

• We're selling gold in Cornerstone Club for the first time since 2024.

Cornerstone is our simple rules-based investing system. It’s designed to help members make superior long-term returns while avoiding big losses. It gained +21% last year and is already up another +14% this year, easily beating stocks, bonds, and a 60/40 portfolio.

Cornerstone’s basic premise is to buy what’s working and sell what’s not. It uses mathematical rules to identify six sectors to invest in at the beginning of each month.

Cornerstone was early to enter gold in March 2024, when it was priced at around $2,300/oz. Today, with gold at about $4,600/oz, we’re booking a 100%+ long-term capital gain.

The surprising thing is that gold hasn’t even weakened that much. It’s still up +39% since this time last year. But other sectors like international stocks, commodities, and momentum stocks have surpassed it, knocking gold out of Cornerstone's allocations.

Here’s a full look at the new allocations for May that were just released:

As I mentioned, Cornerstone is having another great year, helping members stay invested despite tricky markets. Markets came roaring back to new all-time highs in April, and Cornerstone members were positioned perfectly.

Now's a good time to see what a rules-based system that takes the emotion out of investing can do for your portfolio. Click here to get started.

That's all for today. Keep your questions and comments coming.

Chris Reilly

Executive Editor, RiskHedge