In 2025, I had the privilege of speaking with some top investment thinkers for Morningstar’s The Long View podcast. Our team interviewed an array of portfolio managers, strategists, and economists. Many of my favorite moments are included in the Best of The Long View 2025: Investing episode.
Several common themes emerged from the interviews. As investors think about portfolio positioning for 2026, here are a few ideas I found compelling:
Diversify Globally
“There are plenty of reasons as a US investor to have a portion of your allocation international,” said Vince Montemaggiore, a portfolio manager from Fidelity. Among them: the cyclicality of investment performance. He cited the first decade of this millennium, when the Morningstar US Market Index logged a negative return, while the Morningstar Global Markets ex-US Index rose 40%. Global exposure also benefited US investors in the 1970s and 1980s.
Currency influences performance dynamics, and the US dollar was a popular topic of conversation in 2025. Mike Pyle of BlackRock noted that the dollar’s depreciation amid market volatility was unusual, as the US currency tends to benefit from flights to safety. He blamed “concerns around the fiscal trajectory in the United States” for shifting global investor behavior. Making the strategic case for currency diversification was Cullen Roche of the Discipline Funds: “The way that I view international investing is that owning international stocks is really a domestic currency hedge.”
Speaking of hedges, BlackRock’s Pyle mentioned global investing can help investors diversify by theme. The US stock market has become increasingly top-heavy with companies tied to artificial intelligence. By contrast, international equities are far lighter on technology businesses.
Then there’s the long-term growth story for emerging markets. “You want to have a slice of that action,” said Hendrik du Toit of Ninety One, an investment manager, speaking of “the 7 billion people on the march every day trying to improve their lives,” in countries like India, China, Brazil, and South Africa. In an in-depth discussion on China, strategist Louis-Vincent Gave marveled at the country’s technological and manufacturing prowess, quipping, “The future is being built over there.”
Valuations represent a more tactical reason to allocate internationally. “The rest of the world is cheap compared with the US,” Cliff Asness of AQR Capital Management told us around midyear. Asness shared the findings of research performed by his colleagues that 80%-85% of the multiyear outperformance of US equities (before 2025) came from “multiple expansion.” That means US share prices have appreciated out of proportion to their business fundamentals. Warning investors not to extrapolate from recent years, he concluded: “I prefer a diversified portfolio around the world.”
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Broaden Out Your AI Exposure
“All of [our research] points to AI having the characteristics of what we might call a general-purpose technology,” said economist Neil Shearing, who drew parallels to the internet, electricity, and steam power. Our 2025 podcast guests were largely bullish on AI’s prospects. Shearing and others foresee an AI-powered productivity boost.
On the investment implications of AI, though, notes of caution were sounded. Sudarshan Murthy, a portfolio manager with GQG Partners, spoke of a “hype cycle” that accompanies all new technologies. “Very few companies are talking about how they can use AI to generate revenues,” he said. “Generative AI will have a big impact on the world. But there could be air pockets.”
Moreover, AI bullishness has left the US stock market quite dependent on a single theme at the start of 2026. “What you should know, if you’re invested in a [broad US stock market index fund], about a third of your portfolio is invested in the ‘Magnificent Seven’ stocks at the moment,” said Callie Cox of Ritholz Wealth Management. “You are very, very tech-heavy, whether you realize it or intend to be or not.”
Investment beneficiaries of AI may extend beyond technology stocks. “AI makes a value-based company, say healthcare or finance, a little bit more productive,” said Joe Davis, chief economist at Vanguard. In his view, long-term winners from AI will reside in “parts of those investing universes that don’t have the multiples that say the Mag 7 or the technology stocks do.”
Those areas could also include smaller companies, an unloved asset class highlighted by podcast guests. “We have been very much net sellers of large- and mega-cap companies and buyers of mid-cap companies,” said Brian Selmo of First Pacific Advisors. He cited investment flows into passive, market-capitalization-weighted index tracking funds as leaving smaller companies neglected and undervalued. Like value stocks, US small- and mid-cap stocks have underperformed for years. But investment leadership is changeable.
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Tread Carefully in Private Markets
The expansion of private markets is one of the key investment trends of our times. According to PitchBook, Morningstar’s private markets research arm, roughly $16 trillion in capital, sits in funds focused on private equity, private debt, and other “unlisted” assets. You’ve probably heard statistics on the decline in public companies and the rise of “unicorns,” private companies valued at more than $1 billion.
Source: PitchBook. Global universe of private equity, venture capital, real estate, private debt, real assets, secondaries, fund of funds, and co-investment.
While private markets aren’t expected to disappear, not everyone is convinced that investors need to allocate substantial sums to private assets. Investor and author Daniel Rasumussen cautioned investors to “be very wary of illiquid asset classes.” Rasmussen thinks that allocators, especially institutional asset owners, are devoting far too much portfolio share to private equity and private debt. He sees allocations as out of proportion to private companies’ economic importance.
Private debt was a major topic of conversation with my colleague Eric Jacobson of Morningstar’s manager research team. Jacobson addressed speculation in the market that a bubble is forming around private debt. Without weighing in on the bubble debate, he warned that “when you have risk in financial markets, especially when there’s fixed income involved, there are connections and what they call ‘transmission linkages’ that are really, really hard to see because the information is not public.”
Beyond the lack of transparency, the market is lightly regulated and, by definition, illiquid. Speaking about semi-liquid fund structures, Jacobson said: “If you are trying to get your entire investment back, that could take a very long time depending on how it’s structured and whether or not there are other investors trying to get their money back.”
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Stay Invested
Finally, several 2025 guests provided critical long-term perspectives. Author and Wall Street Journal columnist Jason Zweig appeared on the podcast during the tariff turmoil of spring 2025 that sent US stocks into near bear-market territory. While acknowledging concerns around the Trump trade policy, he encouraged investors to ask themselves whether their investments were indeed predicated on free trade. Panic, he said, “is not conducive to good decision-making”—counsel that was vindicated by an equity market rebound in mid-2025.
Barry Ritholz, for his part, downplayed the importance of market-level valuation for investors. “For my whole career, I’ve been hearing how expensive the market is on a Shiller CAPE basis… If you got out of equities because the CAPE was high, you left untold millions on the table.” He talked about how stocks can go through long rough patches, like 1966 to 1982 and the first decade of the 2000s, but then go on long runs when they defy charges of overvaluation.
The long-term power of equities was a key theme of my conversation with Morningstar’s John Rekenthaler. “Over time, equities, they make more money than inflation,” Rekenthaler said. Contrasting stocks to cryptocurrencies or assets without cash flows, he said: “There’s fundamental reality to this… stocks are not gambling in the long-term. There’s no sure thing, but it’s a sensible risk that you’re taking with a high likelihood of a payoff.” Sage wisdom, no matter what 2026 brings.
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