"Supply and demand will always matter, but investors need to focus on the asset that's easiest to manufacture these days: new shares." - Spencer Jakab, WSJ
Most investors spend their energy on the demand side of the market following earnings, rate cuts, AI adoption, and general sentiment. Far fewer watch the supply side. Yet the number of shares available to buy is not fixed. Companies can create new ones through IPOs, follow-on offerings, stock-funded acquisitions, and, critically, employee compensation. Between now and mid-2027, billions of previously restricted shares become eligible to sell. An IPO lockup is a contract that bars insiders, employees, and early investors from selling for a set period, usually 180 days. Traditionally, stock based compensation creates a steady supply flow, like what we see here in Boise with Micron. Post-IPO selling can create supply shocks that the market may not be prepared to full absorb. But what does this mean in a broader context?
Hoeven’s Framework & How we Bucket Investments
Index investors are often unaware of the extent of their exposure to mega-cap risk.. As newly listed mega-caps enter the major indexes, cap-weighted funds buy more of them, deepening concentration in the same theme. In our pursuit of stability, we continue to eschew the 60/40 portfolio. Rather, our primary recommendation for qualifying clients is a barbell. A core investment portfolio is designed around liquidity (and durability). Broken into buckets, this liquid sleeve generally consists of three categories: systematic value or quality shares and equal-weight S&P 500 funds (rather than market cap weighted funds), long-volatility strategies (that thrive during sudden market drawdowns), and short-duration Treasury bills (your “dry powder”). Based on risk capacity, additional high quality bonds may be allocated as well. The goal is to reduce how much a tech-led selloff can damage foundational wealth, while keeping liquid reserves ready to buy quality assets if prices fall.
Then, we deploy institutional alternatives. The liquid money you plan to deploy after a correction must never be the same money committed to multi-year private funds. We’ve written before about how some advisory use exclusivity as sales tactic. Many a over-zealous stock picker “RIAs” and broker-dealers perform blanket allocations to private investments. Investments like private credit might have a place in the portfolio satellite, but always. In the third quarter, shareholders asked to withdraw 39% of Blue Owl Technology Income Corp. and 17% of a second fund, and Blue Owl again capped redemptions at 5% (Bloomberg, Oct 2, 2026). The lesson isn't to avoid private credit. It's to be precise about where you sit in the capital structure and how you can get your money out.
As with everything in investing, specific distributions are highly dependent on individual goals, liquidity needs, and risk tolerance, so please do not take this as general advice.
Physical assets and structured tax-loss harvesting
Two more tools round out the plan. Physical assets, such as income-producing real estate, infrastructure and commodities, can't be issued by a board vote the way shares can. Their supply grows slowly, and many carry cash flows linked to inflation.
Tax-loss harvesting turns volatility into a planning asset. Volatility around lockup dates creates temporary losses even in sound positions. Systematically harvesting them, while staying invested through similar but not substantially identical holdings, creates losses that can offset future gains. Those banked losses become especially valuable when trimming concentrated tech positions would otherwise trigger large tax bills.
Hidden costs and how we manage them
Illiquidity traps. Private funds often lock capital for 7–10 years, and semi-liquid vehicles can gate, as Blue Owl's funds have this year. Keep the liquidity reserve entirely separate from these commitments so you're never forced to sell into a downturn.
Tax drag. Moving out of highly appreciated tech can trigger large capital gains. We stage sales across tax years, pair them with harvested losses, and consider gifting or donating low-basis shares where it fits the plan.
In short, we’re rotating, are you?
Disclosure:
The information presented in this article is intended for general educational purposes and should not be interpreted as individualized financial, investment, tax, or legal advice. Any hypothetical examples, scenarios, or illustrative anecdotes are used strictly to demonstrate financial planning concepts and do not reflect all client results. Because each person’s financial situation is unique, the strategies or ideas discussed may not be appropriate for your circumstances. As an investment adviser representative of a registered investment adviser, we act in a fiduciary capacity and provide advice tailored to each client’s objectives only after adequate understanding of the client’s situation. Before making any financial decisions, please consult with your adviser or another qualified professional.
Hoeven Wealth does not provide tax or legal advice. The tax and estate planning information offered is general in nature. It is provided for informational purposes only and should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.
