In this rebroadcast of an episode from 2021, Paul Arnold and Dan Kemp discuss how advisors can better understand why ESG is important to a client—whether it’s the expression of one’s values or something else. We also look at how advisors might think about matching each client with a portfolio that addresses their unique ESG preferences and needs.

“The oldest and strongest emotion of mankind is fear,” author H.P. Lovecraft once wrote. “And the oldest and strongest kind of fear is fear of the unknown.” Fear of the unknown is no stranger to the investment world these days. We’re living in scary times. And the investors who aren’t feeling jumpy right now tend to fall into one of two categories: those who have a plan—and those who haven’t a clue. Let's talk about how to manage your fear of the unknown when it comes to inflation and...

In this rebroadcast of an episode from 2020, we explore why advisors might change the focus of annual meetings to progress updates with Ryan Murphy, head of decision sciences at Morningstar Investment Management. And Daniel Needham, president, shares his thoughts on how to keep investors focused on the long term.

Short-term worries versus long-term goals—which are guiding your investment decisions? If you’ve done your homework and you’ve given careful consideration to achieving the financial results you want, that question is easier to answer—even if it remains nerve-wracking to stay the course. Here in early 2022, we’re awash in short-term concerns once again. Between inflation, rising interest rates, and more, it’s easy to question the faith you had when the outlook was brighter. So, with that in...

"[W]e can’t avoid the reality that we’re experiencing and probably will continue to experience stress, uncertainty, and change. But the question is, how do we cope?" — Sarah Newcomb Given recent market volatility, we thought it might be helpful to revisit this episode from July 13, 2020, which features two experts on investor behavior and decision-making. Sarah Newcomb, director of behavioral science at Morningstar, Inc., discusses emotions brought on by market loss, talks about how they can...

Rising Interest Rates. New COVID-19 variants. Inflationary pressures. Those and other factors are on the minds of investors as we head into 2022. Will the new year be one of prosperity, or is it time to fortify your defenses? The truth is that it’s nearly impossible to know. And that’s why we at Morningstar follow a mantra of, ”Don’t predict—prepare.” In this episode, we ring in 2022 with our take on how to best prepare for what’s to come, no matter how handy you may or may not be with a...

Environmental, social, and governance. More commonly called ESG, it used to be seen in many parts of the investment world as a niche specialty that was mostly about virtue—something that was nice to do. But now there’s been no question that it’s something we need to do, particularly coming out of Glasgow’s United Nations Climate Change Conference, known as COP26. Nearly 500 financial-services firms from around the world agreed to align $130 trillion with the goals specified by the Paris...

Inflation. It's showing up in headlines and in conversations between everyone from political pundits to investment professionals and clients. It’s no different for us here at Morningstar, and most of what we’re hearing boils down to two key questions: what are our views on inflation, moving forward, and what are we doing to prepare for the potential threat of a continuing rise? In this episode, the conversation revolves around what’s driving inflation in the short and long term, ways we can...

Conviction. The term derives from the Latin verb convincere, which means “to argue.” And that’s the basis for Morningstar Investment Management’s quarterly global convictions: to present an argument that helps an investor achieve their goals. Or perhaps more directly, what are our high-conviction ideas to fuel investor success? We’ll cover a lot of ground in this episode, including recent market performance and trends, what those developments mean in terms of reward versus risk, inflation...

An economic recovery is cause for celebration, but how, exactly, do we capitalize on it? Since it began in 2020, the decline that COVID brought us has been called the deepest and shortest economic crisis in history, and the nature of the forced shutdown followed by the subsequent reopening is an indication of just how unique this recovery has been. In this episode, we examine the recovery’s progress as it stands now. We also touch on where some of the risks may lie and how our portfolios are...

China is a key talking point in the investment community today, as a regulatory crackdown has spooked markets. Chinese regulators have targeted specific sectors such as technology, education and real estate as part of a crackdown aimed at aligning the Chinese private sectors with its long-term policy agenda. In today’s episode, we will take a closer look at recent events in China and discuss both risks and potential opportunities in Chinese stocks today.

ESG investing, which focusses on an investment’s environmental, social, and governance impact or risk, has grown immensely in recent years, attracting significant inflows. But what happens to ESG investing during a market downturn? Are ESG considerations left by the wayside as investors focus on financial market risks? Ryan Murphy, Head of Decision Sciences for Morningstar Investment Management, discusses his research on the behavioral sustainability stress test.

With stocks reaching new highs and companies borrowing at historically low rates, broad markets offer limited upside. So how should investors position their portfolios in face of that?

As more of the US reopens and people begin to return to their normal routines we’ve seen a disconnect between supply and demand, and many are worried that price increases are here to stay. Alfonzo Bruno, associate portfolio manager, shares insights around the current state of inflation, how to interpret updated guidance from the Fed, and how he anticipates inflation pressures around supply chains to ease in a post-pandemic market.

Other than the strong recovery this year, the energy sector has been avoided by many investors. Whether environmental concerns of an increasing number of ESG-focused investors or worries about the secular decline in oil revenues as the world transitions to renewal energy sources, energy stocks have been among the least popular investments out there. Philip Straehl, global head of research at Morningstar Investment Management, welcomes James Foot, Head of Research, Asia Pacific from...

Our Select Equity portfolio managers share five key takeaways from the 2021 Berkshire Hathaway Annual Meeting. Portfolio specialist Jeff Wagner sits down with Mike Corty, Morningstar Investment Management’s Head of our Select Equity Portfolios team and the portfolio manager of our Tortoise portfolio, as well as senior portfolio manager John Owens, who manages Select Equity portfolios, All-Cap Equity and Small/Mid-Cap Equity.

After the late-2020 rally continued into 2021, Philip Straehl and Edward Fane assess the aggregate reward-for-risk picture in world markets and share their views on select asset class opportunities. Philip is the Chicago-based global head of research at Morningstar Investment Management LLC. Ed, based in London, is head of research for Europe, the Middle East, and Africa at Morningstar Investment Management Europe, Ltd., which is an FCA-regulated firm.

Merger and acquisition activity in wealth management is on the rise, with 2020 seeing about 18% more deals--and about 8 times greater deal value-- than the 10-year average, according to Dealogic. What’s driving this consolidation, and how might it affect advisors’ ability to continue to provide personalized service to every client? Marta Norton, chief investment officer for the Americas at Morningstar Investment Management, shares her views on the pressure to consolidate, its impacts on...

We'll have a new episode next week, then every other week for a temporary period. Thanks for listening!

Stocks have generally roared back from their pandemic lows about a year ago. But what about income? Many dividends were cut when COVID-19 shuttered businesses and kept us at home. What’s the outlook for dividend investors now that stock prices have rebounded? George Metrou, portfolio manager for the Dividend Select Equity Portfolios at Morningstar Investment Management, shares his thoughts on managing through the pandemic, and on the current landscape and his outlook for dividend-paying...

While we're off for spring break, we're reprising this episode featuring Terry Hawkins, sales manager at Morningstar Investment Management and Paul Kaplan, research director for Morningstar Canada. They discuss dollar-cost averaging, or the practice of investing slowly over time instead of in one lump sum. Research by Kaplan and others show that dollar-cost averaging might be expected to underperform a lump-sum approach. But what if it's what gets an investor into the markets?

While we're off for spring break, we're revisiting this episode that considers whether and when retirees should buy annuities to insure a steady stream of income, based on David Blanchett's research at the time of original airing. Few products are as polarizing among financial advisors than annuities, but certainly they have a place in the retirement picture for some individuals. In this episode, we look at Blanchett's research, which may help advisors decide when a client should annuitize or...

People often use simple mental shortcuts, also called heuristics or rules of thumb, when they make everyday decisions. And while the behavioral sciences tend to focus on how these shortcuts can backfire and create biases that lead us astray, much of the time these shortcuts lead to pretty good outcomes. But can these rules of thumb improve financial well-being? Ryan Murphy, head of decision sciences at Morningstar Investment Management, discusses his recent research in which he studied...

In this episode, Gareth Lyons and Nabil Salem discuss the somewhat unusual South Korean stock market--unusual in that, this tech-dominated market remained attractively priced until recently. Lyons and Salem review the recent valuation history of this market, analyze drivers of outperformance in 2020, and summarize their current views on South Korea as an asset allocation opportunity. Gary Lyons is a portfolio manager on the Asset Allocation team at Morningstar Investment Management LLC,...