The IPO Wave of 2026
You have probably heard the buzz lately around companies like SpaceX and OpenAI preparing to go public this year — trillion-dollar valuations, and what would be the largest stock offering in history. The numbers are hard to ignore.
We are writing to give you a straight explanation of what is happening, why we think it matters, and — most importantly — what it means for you personally. The short answer is that we think you are reasonably well positioned. The longer answer is worth understanding, and we will keep it plain.
What is Actually Happening
When a privately owned company decides to sell shares to the public for the first time, it is called an IPO — an Initial Public Offering. This lets early investors turn their ownership into cash, and sometimes lets the company raise new money to grow.
Right now, this is happening at a scale we have not seen before. In just the first three months of 2026, global markets raised tens of billions through new public listings — and the biggest names are still coming.
Why We are Paying Attention
Some of these companies may turn out to be great long-term investments. We are not here to tell you they will fail. What we are saying is that large-scale IPO waves have a consistent pattern — and it is worth understanding in advance.
The Waiting Period Has Gotten Shorter
After a company goes public, insiders — founders, early investors, employees with shares — are typically required to wait before selling. This waiting period, called a lock-up, was traditionally six months. The idea was simple: give the stock time to find a natural price before a wave of insider selling pushes it down.
That standard has eroded. The law firm Cooley LLP documented in 2025 that recent IPOs increasingly allow insiders to start selling within the first 90 days — sometimes as soon as the stock hits a target price. More flexibility for insiders means more selling pressure arriving sooner, and the public market has to absorb it.
How This Impacts You - Even If You Never Buy an IPO Share
Most of the money we plan around for you is held in separately managed accounts through Cardinal Capital — the investment manager we partner with — not in passive index funds. So the most direct version of this risk, where index funds are forced to buy new listings at any price, is less applicable to you than to Canadians holding straight S&P 500 ETFs. That said, two channels are still worth understanding.
To be clear: this is a plausible scenario, not a prediction. Markets have absorbed large IPO waves before. But the combination of shorter lock-up periods, concentrated AI valuations, and stretched pricing does increase the likelihood of turbulence — and our job is to think through that in advance, calmly, while there is nothing urgent to react to.
What This Means for Your Portfolio
No portfolio is immune to broad market disruption, and we will not tell you otherwise. What we do believe is that the way your portfolio is built takes situations like this into account.
Every company Cardinal holds has to pass a strict filter: a long track record of growing earnings, a solid balance sheet, a history of paying and growing dividends, and a share price that is reasonable relative to what the company actually earns. In plain terms — we own businesses that make money today, have done so for years, and pay you a portion of that money while you hold them.
The Canadian companies in your portfolio — large, well-established names in insurance, energy, infrastructure and retail — have been operating through recessions, rate cycles and corrections for decades. The international holdings follow the same principle. These are not exciting. That is by design.
The sectors Cardinal focuses on have actually been outperforming the AI-heavy indices in 2026. J.P. Morgan Asset Management noted in March 2026 that this rotation — quality and value outpacing speculative growth — appears to be happening before a correction rather than after, which is a better position to be in.
This is the part we would ask you to spend the most time on, because it is where the real difference gets made. Understanding markets is useful. Having a plan that accounts for them is what actually protects you.
If you are already retired and drawing income from your portfolio, volatility carries a particular risk: bad timing. If a downturn forces you to sell to cover living expenses, those holdings cannot participate in the recovery. The sequence of when returns happen matters as much as the returns themselves.
Below are the three planning conversations we think are most relevant right now. They are not one-size instructions — the right answer depends on your income, balances and goals. If we have not reviewed your plan together recently, this is a good time.
Three Conversations Worth Having
Your Withdrawal Strategy
For most retired Canadians, the smarter long-term move is to draw from your RRIF first — deliberately filling your available tax brackets each year — rather than letting it grow into larger, higher-taxed forced withdrawals later. Your TFSA, by contrast, is worth protecting: with up to $109,000 of cumulative room in 2026, its growth is completely tax-free and withdrawals never affect your OAS.
If you have a spouse, pension income splitting can meaningfully reduce your combined tax bill and help you both stay under the OAS clawback threshold. Done well, this is one of the highest-value moves available to Canadian retirees.
A 1-2 Year Cash Buffer
Make sure you have one to two years of expected living expenses in cash or a high-interest savings account, separate from your invested portfolio. If markets pull back, you draw from the buffer while the portfolio recovers — instead of being forced to sell at depressed prices to pay the bills. It is a simple strategy that consistently shows up in retirement research as one of the most effective protections against bad timing.
Your Income Floor
CPP and OAS are guaranteed and inflation-indexed. They arrive every month regardless of what happens with SpaceX or the Nasdaq. The stronger your income floor, the less you need to draw from your portfolio — and the less exposed you are to bad timing. Deferring CPP to age 70 increases your monthly payment by +42% versus taking it at 65; for many retirees that guaranteed increase is worth more than the investments it might replace.
