Investing Insights

In this discussion, Amy Arnott, a portfolio strategist at Morningstar, and Dan Kemp, Chief Research Officer at Morningstar Investment Management Europe, dive into market insights for 2025. They explore why gold purchases are rising among central banks, the underperformance of small caps, and the reasons behind international stocks outpacing U.S. equities. Kemp highlights the 'Cockroach Hunt' in financial services and emphasizes identifying quality opportunities in the sector. Both guests advocate for a long-term investment strategy amid market volatility.

Dominic Pappalardo, Chief Multi-Asset Strategist for Morningstar Wealth, discusses the implications of concentration risk in today’s stock market. He explains how a few tech giants are driving market returns, making diversification harder for investors. The conversation highlights the historical context of market concentration and what can cause this trend to shift. Dominic offers insights on how to mitigate risks, advising investors to diversify with small-cap and international stocks to protect their portfolios from potential downturns.

Brian Armour, Director of ETF and Passive Strategies Research at Morningstar, shares insights on the exciting developments in crypto ETFs following recent SEC rule changes. He discusses the potential for new investment options and competitive fee structures in the crypto space. Armour also highlights the speculative nature of cryptocurrencies and why investors should approach them cautiously. Furthermore, he explains the introduction of ETF share classes by Dimensional Fund Advisors and the benefits and risks associated with these new financial instruments.

Sarah Hansen, Senior Markets Reporter at Morningstar, delves into the stock market's rally fueled by the AI boom and its implications. She highlights the Fed's recent interest rate cuts and the balance between inflation and a weakening job market. Key risks, such as high tech valuations and the market's selective attention to potential economic headwinds, are discussed. Hansen also explores AI spending trends and the emerging IPO landscape, while advising investors to brace for volatility and maintain long-term discipline amid uncertainty.

Dan Lefkovitz, a Morningstar Indexes strategist, shares insights on avoiding dividend traps, defining them as risky payouts tied to company fundamentals. He explores how Dow Chemical's unsustainable dividend led to a significant cut and highlights warning signs from other brands like Shell and Walgreens. Dan Kemp, Chief Research and Investment Officer, discusses the lagging performance of healthcare and consumer defensive sectors, attributing it to political challenges and high valuations. Both emphasize the importance of understanding portfolio fundamentals.

In this engaging discussion, Amy Arnott, a portfolio strategist at Morningstar Inc., highlights the advantages of cash for short-term investing, especially in light of anticipated Fed interest rate cuts. She warns about the risks of long-duration bonds while offering practical strategies for investors. Dan Kemp, Chief Research and Investment Officer at Morningstar Investment Management Europe, analyzes Oracle's impressive AI-driven transformation and its implications for future market dynamics, urging investors to explore beyond mainstream tech names.

Dan Sotiroff, a Senior Manager Research Analyst at Morningstar, sheds light on the intricacies of stock ETFs. He explains how not all new ETFs are worth the investment and the crucial role of risk-adjusted returns. Dan reveals that ETFs with fewer than 100 holdings are risky and distinguishes between active and passive management styles. He also discusses the challenges of thematic ETFs and the common pitfalls investors face regarding timing and fees. Tune in for essential guidance to make informed ETF choices!

Dave Sekera, Chief US Market Strategist at Morningstar Research Services, dives into the complexities of investing in AI. He discusses whether the AI hype marks a genuine boom or a speculative bubble. The conversation shifts to Nvidia's pivotal role amidst US-China tensions and its potential market opportunities. Sekera also highlights specific undervalued stocks, like ASML and Microsoft, as promising investments. This lively exchange is packed with insights on navigating the evolving landscape of AI investments.

David Harrell, Editor of Morningstar's DividendInvestor newsletter, dives into the intriguing world of US dividend stocks and their surprising international revenue streams. He discusses how many well-known companies depend heavily on foreign markets and the risks of currency fluctuations and geopolitical crises. Harrell also compares revenue from 2021 to today, revealing some unexpected shifts. Investors are urged to consider the balance between US and non-US equities while navigating the complexities of global market dynamics.

Is the 60/40 portfolio living up to its reputation of resilience this year? The merit of a classic portfolio of 60% stocks and 40% bonds has been a matter of debate in recent years. A diversified 60/40 strategy failed to protect investors in 2022’s broad market crash—in fact, an all-stock portfolio would have held up better. However, a historical deep dive from Morningstar concluded that the tried-and-true approach lessened the pain in almost all of the worst market crashes in 150 years better than an all-stock portfolio. Morningstar Inc Portfolio Strategist Amy Arnott discusses the 60/40 portfolio’s ups and downs and its performance in 2025.On this episode:What is a 60/40 portfolio, and why is it popular? We often hear claims that the 60/40 portfolio is “dead” or obsolete. Why does it get criticized so much? Some of that criticism flared up in 2022. Why was the performance so bad for the 60/40 portfolio that year? Volatility has rocked the markets in 2025. How has the classic investment strategy done so far this year? Are there any asset classes that have performed better so far in 2025? Why? And which ones have struggled? Interest rates are sitting above 4%, but market watchers are anticipating the Federal Reserve will cut rates in September. What could that mean for the fixed-income part of the 60/40 portfolio? How do you think the 60/40 portfolio will perform over the next few years? Should people still rely on the 60/40 portfolio, or is another strategy better like the 70/30 or 50/30/20, which can be a mix of stocks, bonds, and alternatives? The tried-and-true strategy has proved its worth. So, what’s the final takeaway for current retirees, future retirees, or anyone seeking less risk?Read about topics from this episode.  The 60/40 Portfolio: A 150-Year Markets Stress TestIs the 60/40 Portfolio Feeling ’22?What We’ve Learned From 150 Years of Stock Market CrashesHow Does Your 60/40 Portfolio Allocation Compare With the Pros?Why 2025 Is the Year to Invest in International StocksWhy It’s Not Too Late to Add International ExposureWhy Holding Assets Outside the US Dollar Has Paid Off in 2025How to Use Gold in Your PortfolioPortfolio Diversification Is Winning in 2025 What to watch from Morningstar. These 16 Standout Funds Are Making Big Bets. Do They Fit in Your Investment Portfolio?Market Volatility: Investors Are Seeking Safety in Gold ETFs. Is It Working?Why Bonds Belong in Your Diversified Portfolio (Even Now)Covered-Call ETFs Are Booming. But Not All Yield Is Good Read what our team is writing.Amy ArnottIvanna Hampton Follow us on social media.Facebook: https://www.facebook.com/MorningstarInc/X: https://x.com/MorningstarIncInstagram: https://www.instagram.com/morningstar... LinkedIn: https://www.linkedin.com/company/5161/ Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.