The Impact of Rising Bond Yields on Investment Strategies

This chapter examines the rising yields on long-term government bonds and their potential impact on investment strategies. It discusses the intricate relationship between bond yields, stock market volatility, and inflation, urging investors to reconsider their asset allocations in light of current market dynamics.

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Two Morningstar research leaders join Investing Insights to discuss whether US investors should consider international stocks and fixed income. They are Dominic Pappalardo, chief multi-asset strategist, and Philip Straehl, chief investment officer for the Americas, for Morningstar Wealth, part of registered investment adviser, Morningstar Investment Management.

Key Takeaways:

How the Markets Have Been Handling Volatility in 2025

Why Economic Data Has Stayed More Stable Than the Markets During Volatility

Why the Timing and the Scale of the Tariffs Were a Shock to the Market

Will International Stocks Outperform US Stocks?

Why Now Is the Time to Check Your International vs US Stock Allocation

Should Investors Broaden Their International Stock Exposure?

Why Global Consumer Stocks Are Poised to Perform Well During Market Volatility

How Rising Yields in Fixed Income Can Create Opportunities for Investors

How the Shape of the Yield Curves Have Shifted

How US Investors Can Mediate US Dollar Weakness With International Equity Exposure

Key Takeaways on the US Market Outlook vs International Market Outlook