Weekly Wrap: Annuities, Stock Picks, and Model Portfolios

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Editor’s note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.

Like the Scouts, we at Morningstar believe in being prepared. We encourage investors to diversify their portfolios so they’re prepared to weather stock market storms. We suggest retirees maintain a cash bucket so they’re prepared to cover near-term living expenses in retirement. And we think stock investors should prepare for down markets by maintaining a list of high-quality stocks to buy on weakness.

When it comes to being prepared with the bond portion of your portfolio, it really boils down to one of two things today: accepting paltry yields or adding risk for incremental return. My colleague Brian Moriarty examined the state of fixed income today in an excellent article earlier this week, noting: “Gaining protection from one kind of risk, such as rising rates, typically means exposure to losses of a different kind, such as credit risk. The solution to this conundrum is going to be different based on each investor’s requirements, expectations, and risk tolerance.”

At the end of the day, one of the goals that most of us prepare for is retirement. Given that today is National 401(k) Day, there’s no better time to revisit your retirement plan. For some, “revisit” may really mean setting up your first 401(k) plan; for others who may be hands on, it may mean answering some key questions. Review our 401(k) plan guide for ideas about how to make the most of your 401(k) plan—or how to prepare for retirement if you don’t have access to one.

Susan Dziubinski

Editor’s Picks

Do You Need an Annuity for Retirement Income?

Some guidelines on figuring out if an annuity makes sense for you, and if so, how much to allocate.

7 Stocks to Buy on a Dip

These wide-moat, low-uncertainty names may be fairly valued today, but they should be on quality seekers’ watchlists.

The Model Portfolio Landscape in 7 Charts

What’s driving their rapid growth and how we’re helping make sense of it.

Our Ultimate Stock-Pickers’ Top 10 Buys and Sells
Funds see value in a diverse range of sectors.

The ABCs of Estate Planning for IRAs Under the Secure Act

A quick start guide simplifies planning choices for clients’ retirement benefits.

Baby Bonds: Turning the Next Generation Into Investors

The program could make strides to narrow the racial wealth gap, but the details still need to be worked out.

Retirement Planning When You Have Enough

Not every retiree needs to gun for higher returns, but a conservative portfolio can court its own risks.

The State of Low-Yielding Bond Funds

Fixed-income investors are between a rock and a hard place: accept low returns or add incremental return at the risk of significant losses.

What Characteristics Are Linked to Consistent Dividend Payments?

We take a closer look at balancing dividend durability and yield.

The Incredible Shrinking Fee

How low can fund fees go?

What These Gold-Rated Equity Funds Are Doing Differently

A look at how these Morningstar Medalists have differentiated their portfolios from similar strategies.

Solar Stocks Are Too Hot
They may have a sunny outlook, but they trade above what we think they’re worth.

What’s Undervalued Today?

We take a look, sector by sector.

Are Funds Still the Future?

There’s a challenge from customized investments.

The U.S. Needs Only One 401(k) Plan

The marketplace has delivered its verdict.

Meb Faber: ‘To Be a Good Investor, You Have to Be a Good Loser’

The author, podcast host, and CIO of Cambria Investment Management discusses current market valuations, trend-following, and how history can make you a better investor.

8 Top Funds for Sustainable Investing

These medalists earn high ESG Commitment Level ratings.

How and Why to Donate to Charity (Even If You Don’t Get a Tax Benefit)

Budgeting for donations is a way to make sure you’re spending your money in ways that reflect your values and support issues that you care about.

How Do You ‘Optimize’ a Portfolio for the Real World?

Psychologist and author Daniel Crosby argues that portfolios that factor in how people behave are better than ones perfected on a spreadsheet.

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