Financial Freedom Insights: Issue 13

Presented by:

Financial Freedom Starts Here

Check the website missingmoney.com annually to see if you have any unclaimed property out there. Don’t get your hopes up too much but sometimes people can have tens or hundreds of dollars to claim!

Use the code “RELAUNCH2026” to get 50% off of our Master Your Money. Build Your Future online courses program. That means you only pay $2.50 a month for all of our current, and future, courses for life!

We currently have over 75 hours of self paced content that will teach you all about Personal Finance, Investing, and Day Trading. We even have a Personal Finance 301 course that takes you step by step through our trademarked create your Blueprint to Financial Freedom^TM Financial Plan.

We have made this very affordable so we can help as many people as possible with their finances. If you know someone who this could benefit please share it with them!

The coupon expires tonight (July 7th) at midnight!

What Do SpaceX, OpenAI, and Anthropic Have in Common? Perhaps Your 401(k)?

Financial Freedom Insight: Table of Contents

There has been loud chatter surrounding SpaceX’s recent $1.77 trillion IPO. Specifically, there is concern about the influence this stock and other tech and AI IPOs are expected to have on the markets, and, as a result, on your 401(k).

SpaceX, AI, and tech stocks will make up a larger part of the index funds held in many 401(k)s. If this sector continues to see bullish growth, all well and good, many experts fear an impending tech bubble that could crash the markets.

Let’s take a close look at whether the fear is unfounded, and if not, what you can do to protect your retirement savings.

IPOs and the Tech Landscape

Elon Musk’s SpaceX debuted on the stock market in mid-June with a valuation of $1.77 trillion,[1] making Musk the world’s first trillionaire. That means that Elon Musk’s rocket connectivity and his AI companies are included in popular index funds that likely comprise part of your 401(k).

The concentration of tech stocks in index funds will be further compounded when OpenAI and Anthropic follow the same IPO path in the not-too-distant future. Anthropic is potentially looking at an IPO in late 2026 with an expected valuation of around $1 trillion or more, and OpenAI is looking at an IPO in 2027 also at a valuation of around $1 trillion.[2]

Pundits are sounding the alarm because this means your 401(k) savings in index funds are also tied to major technology firms. An AI bubble could drastically affect your savings.[3] Just how worried should you be about this exposure in your 401(k)?

What You Need to Know About the Tech Sector’s Influence on Your 401(k)

Prominent index funds from Vanguard and BlackRock now hold shares in Elon Musk’s rocket, connectivity, and AI companies. The sheer size of these companies ($1.77 trillion) means that their performance will be reflected in retirement accounts through investments in index funds.

If the bubble is real, the market could crash.

The good news is that a market crash can reduce your 401(k) balance, but it does not mean you will lose all your money if you are diversified. When the market falls, the value of the shares or funds you own in your 401(k) declines, but you still own the same number of shares; they’re just worth less on paper.

You only lose money if you sell your investments at a lower price than you paid. If you hold through the downturn, you keep all your shares, and they can recover in time. Even in severe crashes like 2008, investors who stayed invested saw recoveries within a few years.

So, if you are young, you can ride out a market downturn. If you are close to retirement, you might want to make a few changes.

Do You Have Time for the Market to Recover?

Depending on your age, if you continue to hold your investments and to practice dollar-cost averaging, the market has historically always recovered, and in theory you should recoup any losses. If you are close to retirement, however, you may not have sufficient time for that.

In that case, the best thing you can do is consult a financial advisor to make sure your portfolio is optimally balanced. Your portfolio should be less aggressive, favoring a more conservative asset holding strategy focused on longevity rather than growth.

If you are still worried about your 401(k), here are some ways to protect it.

How to Protect Your 401(k)

There are other steps you can take to ensure you are ready to weather market headwinds.

Rebalance Your Portfolio If You Are Approaching Retirement

As I said, if you are a few years from retirement, talk to a financial advisor to make sure that your portfolio is not overexposed. Take a more conservative approach to your finances to avoid potential losses you may not have time to recover from.

A competent advisor can ensure your portfolio includes safer investments, balanced with some growth assets, so your money still works for you.

Don’t Withdraw Funds Early Due to Fear

It’s scary when you see the market crashing, but withdrawing money early from your 401(k) is a bad idea. You’ll face IRS tax penalties, and you might sell at a low point. If you are young, don’t sell when stocks are down because you have decades until retirement during which your stocks may recover.

If you are working with a financial advisor, they can create a financial plan that considers any potential market crashes, so you needn’t worry about the long-term effects.

Diversify Your Savings

A diversified portfolio that spreads your investment across asset types spreads exposure. If one type of asset drops (such as tech stocks), you might benefit from gains in another asset type (such as healthcare).

For example, consider investing in healthcare, utilities, and consumer goods. Regardless of the economy, people have no choice but to spend on healthcare, food, and essential items.

With a financial advisor, you can get the right mix between higher-risk stocks and safer assets like bonds, mutual funds, ETFs, and high-yield savings accounts.

Keep Making Contributions to Your 401(k) and Other Retirement Accounts

If you steadily contribute to your 401(k), you take advantage of dollar-cost averaging, which is an effective growth strategy. Investing steadily evens out the market's ups and downs over time. In fact, cutting back on your contributions during a downturn may cost you the opportunity to invest in assets at discount prices.

Invest in Alternative Assets

You can also invest in alternative assets, such as real estate or precious metals. After the 2008 recession, home values dropped, and investors were able to buy cheap homes that increased in value over the next few years.

Precious metals, like gold and silver, tend to increase in value during a market slowdown, so it’s best to invest here when the market is relatively bullish for stocks and other assets.

Keep Some Cash on Hand

Keep an emergency fund so that if you need cash for an emergency, you don’t have to sell assets at a loss. Having cash reserves that cover three to five years of living expenses would be ideal if the market takes a turn for the worse.

Tech Stocks and Your 401(k)

Elon Musk’s SpaceX $2.77 trillion IPO and the stock’s listing in major markets are just the beginning. OpenAI and Anthropic are both looking to list on the stock markets in the near future. At that point, the influence of tech stocks will be undeniable.

You have reason to be concerned about the proliferation of tech stock IPOs that could influence your retirement savings, but you can preserve your savings and your 401(k) by taking precautions.

Consider alternative investments, diversify your portfolio, continue contributing to your 401(k) in both rising and falling markets, and work with a financial planner so you have a plan in place and can stay calm during volatility.

FAQs

1. How will tech IPOs like SpaceX, OpenAI, and Anthropic affect my 401(k)?

Major companies like SpaceX (and potentially OpenAI and Anthropic in the future) will be integrated into index funds that will comprise a portion of your 401(k). Their high valuations mean their impact on the index's performance will be significant. When these tech stocks rise, your retirement savings benefit, but because your account has a higher concentration in the tech sector, a bubble could mean your 401(k) will suffer.

2. Is a "tech bubble" likely, and how will it affect my savings?

The jury is still out on whether there is an AI bubble. Tech companies continue to invest in AI technology and data centers. If a crash occurs, that won’t mean you lose your money. You still own the exact same number of shares; they are simply worth less.  Historically, even after severe crashes like the 2008 recession, the market recovers within a few years.

3. How can I protect my savings and my 401(k)?

You can protect your savings and your 401(k) by keeping a diversified portfolio, continuing to invest in your 401(k), taking advantage of any employer matches, and avoiding early withdrawals. Most importantly, consult a financial advisor to ensure your plan is right for you. If you are younger, you can save aggressively because you have time to make up for any market losses. If you are closer to retirement, you should rebalance your portfolio and reduce the risk of losses.

4. Why should I keep contributing during a downturn?

If you continue to contribute to your 401(k) regularly, you even out market volatility. This is a strategy called dollar-cost averaging (DCA).  Continuing to contribute during a market downturn is an effective strategy because it allows you to buy high-quality stocks at "discount" prices.

5. What are some effective ways to diversify my portfolio against tech sector volatility?

To minimize the risk of a tech market pullback, you can spread your investments across a variety of sectors and asset classes. Here are some examples:

Proverbs 21:5 (ESV)

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.”

Thanks for reading!

Haas Trade Financial Freedom Insights

P.S. Think this newsletter could help someone you know? Please consider sharing it. Our goal is to help as many people as possible achieve their dream of financial freedom. It could all start with a simple click!

Friend or Family send you here? Subscribe below!

Want to learn more about Haas Trade? Check out our website below.

Tired of being stressed out about your finances and feeling like you aren’t making progress? We offer 1 on 1 Financial Coaching programs that may be perfect for you! Click below to learn more.

Prefer self-paced online learning? For only $5 a month we offer an ever growing list of online self-paced courses to help you on your journey to financial freedom. Click the button below to learn more.

Looking for a financial advisor? Haas Trade is only a financial coaching company but our partner company Haas Trade Advisors IS a Fee-Only Fiduciary Financial Advising firm that can help you with your saving, investing, and retirement needs via comprehensive financial planning. Click the button below to learn more.

P.S.S. Okay now its the end of the newsletter, we hope everyone had a safe, relaxing, and enjoyable July 4th! Happy 250 Years to the United States of America!