In a recent session of the Investors First series, Kunal Kapoor shared insights and forecasts for 2026 alongside three esteemed strategists from Morningstar: Preston Caldwell, Michael Field, and Kai Wang. The discussion began with reflections on 2025, where each strategist conveyed observations and potential surprises that could shape the upcoming year.
Kaith Wang emphasized Morningstar’s unique approach to forecasting, which avoids the herd mentality prevalent in market predictions, particularly in Asia. He underlined the importance of taking a long-term view when assessing high-flying stocks, suggesting that rapid growth in certain sectors may not be sustainable.
Caldwell and Field echoed each other’s sentiments regarding the surprising resilience of the market in 2025, especially in the context of artificial intelligence (AI) investments. Caldwell noted that while the enthusiasm surrounding AI has led to substantial market gains, there will need to be tangible impacts on the economy for these valuations to hold. Field remarked on the market’s ability to weather surprises, including tariffs and other shocks, and expressed uncertainty about whether this trend would continue in 2026.
Wang raised concerns about certain stocks, particularly in Asia, which lack solid earnings and trade at lofty multiples. The strategists also discussed the concentration of investor portfolios in high-value stocks, like those in the AI sector, and touched on the implications for future growth and risk management.
The topic of diversifying international investments was introduced, with Caldwell suggesting that the current overvaluation of the US dollar presents further opportunities in foreign markets. The panel highlighted how different regions are poised to respond to varying economic conditions, with Europe potentially gaining momentum due to its low inflation and low interest rates.
As concerns about consumer spending rise—prompted by increasing unemployment and other macroeconomic fluctuations—the strategists urged investors to remain vigilant about the potential risks in their portfolios. With insights into the importance of adhering to long-term asset allocation strategies, they cautioned against overreacting to market volatility and encouraged a balanced approach.
In discussing their own portfolios, Caldwell shared that he maintained a cautious approach, while Wang mentioned a particular interest in Bitcoin as a leading indicator of market sentiment. Field indicated his intent to rebalance his portfolio by trimming positions that have reached fair value, freeing up cash for potential market dips.
As the conversation drew to a close, Kapoor summed up the prevailing advice: investors should stay the course, rebalance wisely, and continue to focus on long-term strategies despite short-term market noise. The session concluded with the promise of future insights and continued engagement in the ever-evolving financial landscape.
