Simple, but Not Easy

Some have called this the weirdest housing market in recent history due to the unusual mix of high interest rates and declining affordability. And yet, we still have record high home prices across the 20 largest housing markets in the country. This month, we're diving into the U.S. housing market, a topic very relevant to many investors given a house is often the largest single asset one owns.

In this episode, we're excited to shed light on the US housing market, what makes it challenging, what makes it unusual, and what needs to change for it to improve. We're joined by Preston Caldwell, Morningstar's Chief US Economist and Brian Bernard, Director of Equity Research specializing in the industrial sector, which includes homebuilders.

Welcome back to Simple But Not Easy. We hope you had an enjoyable summer and are ready to finish the year on a high note. In today's episode, we're excited to dive deep into the world of investing, market strategies, and the future of wealth management. We'll start by getting to know Philip Straehl, Morningstar's new Chief Investment Officer of the Americas, as he shares insights from his career journey and a wealth of knowledge on the evolving market landscape. From there, we'll explore Morningstar's mission and investment philosophy, and importantly, what sets it apart in an ever-evolving financial world. Wealth management industry trends are also on the agenda, and we'll close with some investing themes that everyone should be thinking about.

A special live episode from the Morningstar Investment Conference. Two of Morningstar Wealth’s investment leaders—Matt Wacher and Ricky Williamson—joined the show to help us dig into what’s already happened this year and where we may be headed.

The topics covered included:

• The Fed and where rates may be headed

• Further discussion on fixed-income

• US stocks are off to another hot start this year. Can outperformance continue?

• Every business is thinking about AI. How is it impacting markets?

• And how should investors be preparing for a presidential election?

And as always, we address the implications on client portfolios and help consider action items.

The evolution of financial advice in a few decades time has been nothing short of revolutionary. The industry's transformation has been driven by technological advancements, regulatory changes and evolving investor preferences. Traditional methods of in-person advice have been expanded to include digital platforms, providing investors with greater accessibility and customization. And we've all observed an evolution in financial planning journeys and an increase in the number of advisors making financial planning core to their value proposition. But we still have to ask, is there room for improvement?

Much of the discussion around financial advice tends to be around asset allocation, product selection, and fund structures. These are all worthy conversations and topics we’ve enjoyed discussing previously on this show. But one topic that feels underexplored: how do advisors deliver financial advice to clients across generations? A retired client in their 70s needs a much different advice offering than a 40-year-old client in their prime work years. In this episode, we are diving into the fascinating intergenerational dynamics of financial advice.

The Magnificent Seven continue to capture the attention of advisors and investors, dominating U.S. equity performance over the last year. Will this trend continue throughout 2024? Will growth stocks continue to beat value? What about large versus small? And what is 2023's signal about where markets are headed this year? We're delighted to be joined by John Owens, Senior Portfolio Manager for Morningstar's Select Equity Strategies, and Paul Tait, Portfolio Specialist at Morningstar Wealth. Together, they help unpack the landscape for U.S. stocks in a digestible manner.

The topics we're discussing today align with the recent release of Morningstar Wealth's 2024 Market Outlook.

A recession seemed to be the consensus view entering the year, but markets love to fool the masses, and a stock market rally followed. However, the rally was not evenly distributed. Bonds, for example, remain in a multi-year drawdown, and many investors are questioning their role in a portfolio. With this as the backdrop, what actions make sense to support clients?

In today's episode, we're delighted to have Morningstar Wealth's CIO of the Americas, Marta Norton, and Chief U.S. Economist, Preston Caldwell with us to dig into the outlook, share their perspectives, and, as always, be sure to address the implications on client portfolios and any suggested actions to take

A lot has already been said about the potential of artificial intelligence, or AI, but how are people actually engaging with it? And how should investors think about their AI exposure in a portfolio? Morningstar has invested heavily in generative AI, with Morningstar Mo taking the stage at our investment conference, and in a first, we're delighted to be joined by a special guest: Mo the AI character. We’ll also be joined by Adley Bowden, Head of Individual Investor and Grady Burkett, Portfolio Manager of the Hare strategy. This marks the start of a new season of Simple But Not Easy, with Nick VanDerSchie taking the mic from Jonathan Linstra, whom we thank for his fabulous insights. Together, let's turn AI speculation into real-world application.

Financial technology is going through a new wave of change, with artificial intelligence – or AI – taking the world by storm. But the wealth tech space is already incredibly complex, with literally hundreds of tech providers battling for market share across the advisor workflow. So, what does Ezra Group, a prominent WealthTech consultant, have to say about this? How can we get ahead of this change? We're delighted to be joined by Craig Iskowitz, Founder of Ezra Group. Together, we’ll dig into his latest technology predictions, covering AI, integration opportunities, fractional outsourcing, and more. A key takeaway: "Meet once a year with your team and talk about your technology."

The need for great financial advice continues to grow, with a landscape we haven’t witnessed in 15 years. So, what does BlackRock, the world’s largest asset manager, have to say about this? What might we expect from here? In this episode, we’ll dig into the latest advice trends, covering the use of models, behavioral application, and evolving investors’ needs. We're delighted to be joined by Liz Koehler, Managing Director and Head of Advisor Engagement from BlackRock.