Liz Ann Sonders and Collin Martin examine the market backdrop shaped by the Middle East conflict, noting that while oil price volatility has influenced inflation expectations and Treasury yields, its broader economic impact has been limited so far due to lag effects and structural shifts in the U.S. economy. Meanwhile, investor attention has returned to earnings season and AI-driven growth, with a narrow group of mega-cap companies responsible for a disproportionate share of earnings upgrades—highlighting ongoing concentration risks in both markets and fundamentals.

Then, Collin Martin is joined by Inga Rachwald, director and senior investment portfolio strategist supporting Schwab Asset Management. Inga addresses common challenges, including the perceived breakdown of diversification during periods of market concentration or rising rates, and explains why these are often misinterpretations driven by inappropriate benchmarks. The discussion introduces goal-based investing as a more practical framework, aligning portfolios with specific time horizons and objectives rather than short-term performance comparisons.

Finally, Collin and Liz Ann look ahead to next week’s upcoming macroeconomic indicators and key data releases. 

To learn more about behavioral biases that can cloud your judgment, check out the latest episode of the Choiceology podcast, hosted by Katy Milkman.

On Investing is an original podcast from Charles Schwab. For more on the show, visit schwab.com/OnInvesting. 

If you enjoy the show, please leave a rating or review on Apple Podcasts.

Important Disclosures

This material is intended for general informational and educational purposes only. This should not be considered an individualized recommendation or personalized investment advice. The securities, investment products and investment strategies mentioned are not suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decisions.

All expressions of opinion are subject to change without notice in reaction to shifting market, economic or political conditions. Data contained herein from third party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Past performance is no guarantee of future results.

Investing involves risk, including loss of principal.

Diversification, asset allocation and rebalancing strategies do not ensure a profit and do not protect against losses in declining markets.

Rebalancing may cause investors to incur transaction costs and, when a non-retirement account is rebalanced, taxable events may be created that may affect your tax liability.

Performance may be affected by risks associated with non-diversification, including investments in specific countries or sectors. Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income, municipal securities including state specific municipal securities, small capitalization securities and commodities. Each individual investor should consider these risks carefully before investing in a particular security or strategy.

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Lower rated securities are subject to greater credit risk, default risk, and liquidity risk.

Currency trading is speculative, very volatile and not suitable for all investors.

Investing in cryptocurrencies involves risk, including the risk of total loss of principal invested.

Cryptocurrencies such as bitcoin and ethereum are highly volatile, are not backed or guaranteed by the bank, any central bank or government; are not deposits; are not FDIC insured; are not SIPC protected; and lack many of the regulations and consumer protections that legal-tender currencies and regulated securities have.

Investing in alternative investments is speculative, not suitable for all clients, and generally intended for experienced and sophisticated investors who are willing and able to bear the high economic risks of the investment. Investors should obtain and carefully read the related prospectus or offering memorandum, which will contain the information needed to help evaluate the potential investment and provide important disclosures regarding risks, fees and expenses.

All names and market data shown are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.

Forecasts contained herein are for illustrative purposes only, may be based upon proprietary research and are developed through analysis of historical public data.

The policy analysis provided by Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.

Indexes are unmanaged, do not incur management fees, costs, and expenses and cannot be invested in directly. For more information on indexes, please see schwab.com/indexdefinitions

Inverse correlation refers to investments that tend to move in opposite directions: when one rises, the other falls.

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