Simple, but Not Easy

From all of us at Simple but Not Easy and Morningstar Investment Management, Happy Thanksgiving! If you’re in a mood to give thanks—or just want to hear others do so—you might check out Episodes 23 and 24, in which a passel of our guests share what they were thankful for this time last year, or something they’d be thankful to see in the future. Or, here we rebroadcast Episode 16, a conversation with Daniel Needham about value investing and why we take a valuation-driven investing approach. We were reminded of this episode after reading a recent article in the Financial Times by one of our favorite market commentators, Michael Mauboussin. In this episode, Needham, president and global chief investment officer at Morningstar Investment Management, shares his views on value investing and the way his team uses a valuation-driven approach to multi-asset investing. As Charlie Munger has famously said, “All intelligent investment is value investment because why would you want to buy something which wasn’t worth as much as you were paying for it, and who wouldn’t like buying something for less than it’s worth?" Needham describes how we aim to do this in an asset allocation and portfolio construction context.

Good decisions are often built on good forecasts. But forecasting is hard, in part because it requires us to be aware of both what we know and what we don’t—or even can’t—know. Dan Kemp and Ryan Murphy discuss what good forecasting looks like. Dan is CIO for EMEA at Morningstar Investment Management Europe Ltd., an FCA-regulated firm. Ryan is head of decision sciences at Morningstar Investment Management LLC.

The Nov. 3 elections lived up to the hype. They've consumed much of our time and attention of late, but how should investors respond to the election returns—and how should they not respond? Marta Norton discusses how our investment team at Morningstar Investment Management is navigating this environment, and the different rolls investors and asset managers play in helping people reach their financial goals. Ryan Murphy shares some thoughts about how investors can avoid emotional pitfalls in these turbulent times. Marta is the chief investment officer for the Americas and Ryan the head of decision sciences at Morningstar Investment Management.

Daniel Needham, President and Global CIO, Morningstar Investment Management LLC, discusses how the US election picture and rising COVID-19 rates may affect the economic recovery in the U.S. Could investors be more bullish about the economy than what’s often portrayed in the media today?

Despite uncertainty around upcoming elections and the ongoing pandemic, we continue to find assets we believe can deliver attractive returns over the long term. In this episode, Philip Straehl, global head of research, investment management, and Edward Fane, portfolio manager and global lead for Americas fixed-income research, discuss the macro reward-for-risk picture and why we like certain asset classes.

Market gyrations, a weak economy, continuing trade wars, resurging COVID-19 cases, civil unrest, and one of the most contentious elections in recent history. Given these risks, how can advisors best help clients succeed? Ryan Murphy, head of decision sciences at Morningstar Investment Management, shares some thoughts about coaching clients to make better decisions. And Marta Norton, CIO for the Americas, connects risk and better decision-making with investment portfolios.

Growth-style stocks outpaced value-style stocks in the decade or so leading up to 2020. Then something interesting happened. Instead of reversing—as these trends typically do if given enough time—it accelerated. Growth stocks’ outperformance since late March has about doubled its outperformance since 2007. Philip Straehl, head of capital markets & asset allocation at Morningstar Investment Management LLC, analyzes drivers of this outperformance and discusses his outlook for value and growth over the next decade.

Elections are always big news, but this year's seem especially so. Setting the hype aside, we consider how the election might affect investors. Daniel Needham, president and global CIO, provides some historical context for election returns for investors, a snapshot of current probabilities of who might win, and some thoughts on how these outcomes may affect investors.

Before her Ivy League education and starting her financial advice practice, Ephie Coumanakos grew up in Athens, Greece. Rooted in business and hard work, she connects with her engineering and other analytical clients in Wilmington, DE, with clear communication. Financial advice from books or the media is too generic to be worth much, she says; people who want added financial value should seek an advisor who delivers personalized advice.

Paul Arnold, portfolio manager of the ESG Asset Allocation series, discusses the growing interest in sustainable investing, as well as his approach to managing portfolios with the dual goal of seeking to do good without giving up returns. See Episode Notes below for a link to the slides mentioned in this episode, or email us at simple@morningstar.com

Global stock markets this year have gone through a dramatic sell-off and recovery in record time. Perhaps more importantly, we’ve seen a significant decline in economic activity since February, likely marking the onset of a recession. In this episode, Daniel Needham and Philip Straehl look at past recessions and compare them with the current environment. We consider what past market recoveries have looked like and discuss how our investment team is considering these lessons from the past to uncover potential long-term opportunities today. Daniel Needham is president & global CIO, and Philip Straehl is head of capital markets & asset allocation, Americas, at Morningstar Investment Management.

George Metrou, portfolio manager for the Dividend Select Equity Portfolios, talks about the poor performance of dividend-paying stocks so far in 2020, despite their reputation for being defensive. He also discusses why he holds cash, his thoughts on companies cutting dividends, and his outlook for income going forward.

John Caserta grew up in North Haven, Conn., where he’s now a Chartered Financial Consultant and managing director at Caserta & de Jongh LLC. His second office is in New Haven, home to his alma mater, Yale, where he studied Italian and played trumpet in concert and jazz bands. His frequent media appearances and alumni connections are helping him grow his practice. Listen to hear Caserta share the most underrated piece of financial advice.

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 and global CIO, shares his thoughts on how to keep investors focused on the long term.

Sarah Newcomb, director of behavioral science at Morningstar, Inc., discusses emotions brought on by market loss, talks about how they can affect decisions, and offers some ways to cope. Ryan Murphy, head of decision sciences at Morningstar Investment Management, discusses cognitive biases to watch out for and ways investors can make better decisions.

Kevin Schaefer coaches clients to plan for the worst, and to be content. An obsession with money distorts smiley faces into ones with dollar-sign eyes and a squiggly mouth because it often leads to aggressive investing that's like being on a roller coaster. A smoother ride, he says, keeps "a simple smile on your face." Schaefer, a CFP and founder at Spirit West Certified Planning, LLC in Scottsdale, Arizona, says, "There aren't enough contrarians" paying attention to risks embedded in passive index-linked investments. "I'm hoping that trend (toward passive) will break and people will get back to basics." 

Daniel Needham puts the past decade of performance of the U.S. and ex-U.S. stock markets into a long-term context. Then Philip Straehl shares his views on why dominant U.S. stock performance is far from guaranteed. Daniel is president & global CIO of Morningstar Investment Management LLC, and Philip is head of capital markets & asset allocation. See Episode Notes below for a link to the slides Daniel and Philip discuss.

Our equity portfolio managers talk about how they're navigating the COVID-19 crisis and their outlook.

In this episode, we take a closer look at the recent US stock market rally from its March low, and address some questions frequently asked by advisors around assessing risk and behavioral coaching in these unusual times. Guests, via a previously recorded webcast, are Daniel Needham, president and global CIO, and Ryan Murphy, head of decision sciences, at Morningstar Investment Management.

Growing a financial planning practice can be challenging at the best of times. But what if you had to replace your in-person presentations and meet-and-greets with online events and marketing tools? In this episode, Erik Bowman talks about how he’s looking to attract new clients in a shelter-in-place COVID-19 world.