Weekly Wrap: Our Outlook on the First Quarter, Inflation, and Tax Increases
We recap the week on Morningstar.com and note the most popular stocks, funds, and exchange-traded funds.
|Editor's note: Read the latest on how the coronavirus is rattling the markets and what investors can do to navigate it.|
Just as more arms get jabbed with COVID-19 vaccines each day, more stimulus dollars are hitting bank accounts and mailboxes. Restaurants are reopening, baseball is welcoming back fans, and Godzilla vs. Kong made an impressive $50 million in its first weekend in theaters.
Let the spending begin! And with it, talk of inflation. No, not runaway inflation, 1970s-style. The Fed is unlikely to let inflation go unchecked--but it has said it will allow for higher inflation until the economy gets back on track.
Should you be concerned about inflation? As with most money matters, it depends. For starters, it depends on your personal inflation rate. Inflation isn't just about where the Consumer Price Index is; it's also about whether your own pocketbook is feeling the pinch of rising prices (and how great that pinch is) based on your own spending habits.
It also depends on your life stage. Investors in accumulation mode probably have enough stock exposure to generate portfolio returns in excess of inflation--and there's a chance a raise from your employer could help cover increases in your personal inflation rate.
It's a different story for those nearing or in retirement, though. Those approaching retirement might wonder how inflation could impact their withdrawal-rate plans. And those who already rely on their portfolios for retirement income likely have more modest equity allocations to blunt inflation’s impact.
So, before heading out to that restaurant, ballpark, or movie this weekend, conduct a personal inflation check to figure out if you should, in fact, take action. Action might include increasing your savings rate (and spending less), considering a more conservative starting withdrawal rate, or adding Treasury Inflation-Protected Securities to your portfolio.
Morningstar's Take on the First Quarter
Our analysis of the first quarter in stocks and funds.
Why You Should Still Care About Inflation
Inflation hasn't been much of an issue lately, but it's still a long-term threat.
The Workers' Guide to Retirement Income
A brief overview of the topic for those who have not yet retired.
Top Earners, Businesses Likely to See Tax Increases
We think tax hikes for businesses are inevitable as Democrats seek infrastructure upgrades, healthcare expansion, and other priorities.
33 Undervalued Stocks for the Second Quarter
Here are our analysts' top ideas in each sector for the coming quarter.
2 Stocks to Play the Digital Learning Boom
We may be at the next inflection point for online learning.
Portfolio Planning and Personal Finance With Christine Benz
When Higher Inflation Meets Your Withdrawal Rate
While few are predicting a 1970s-style inflation spiral, it's still worth thinking through how inflation could affect your plan.
Mutual Funds and Exchange-Traded Funds
Vanguard Mishap Leads to an Estimated $200 Million Windfall for Investors
Execution missteps in its Nevada 529 plan resulted in an exposure to stocks that was an eye-popping 20 percentage points more than investors expected.
Another Quarter of Gains for the U.S. Equity Market
Value drives U.S. equity market gains in the first quarter.
The First Quarter in Bond Funds
Rising interest rates unsettle bond markets.
4 Topnotch ESG Funds
These Morningstar Medalists are great building blocks for a portfolio focused on sustainable investing.
When It Comes to Indexes, the Devil is in the Details
Meaningful differences exist even among the most seemingly similar benchmarks.
Behind the Rise and Fall of an Esteemed Value Shop
IVA had an auspicious launch, an unusual life, and a startling end.
The First Quarter in International-Stock Funds
The recovery continues.
Drugmakers and Managed-Care Firms Still Look Undervalued
We don't expect any major changes to U.S. healthcare policy.
Utilities Shaking the Interest-Rate Stigma
Strong fundamentals should allow the sector to continue producing positive returns even as interest rates climb.
GE's Stock Price Largely Reflects Our Positive Outlook
Here's how we differ from the bears and why we think long-term fundamentals will improve.
Why We Like Walgreens, but at a Better Price
Strong international performance and pharmacy margins helped in the first quarter.
3 Overlooked Dividend Stocks That Top Managers Like
These wide-moat firms are currently undervalued.
Vaccine Rollout Drives Energy's Rise
But the sector's current tailwinds are likely unsustainable, so investors should prioritize high-quality businesses with stable balance sheets.
Drugmakers and Managed-Care Firms Are Poised for Growth
These areas remain undervalued even though valuations for the overall healthcare sector look a bit high.
Emerging-Markets Equities: A Promise Half-Fulfilled
Their economies have astonished; their stock gains, not so much.
Keep Keeping Your Distance: An Updated Look at 401(k) Participant Behaviors During the COVID-19 Crisis
Self-directed individuals made more changes than investors using professionally managed solutions.
How Advisors Can Make Better Use of Their Time
Dedicate office hours, a time for "brain-picking."
How To Incorporate Sustainable Investing Into Your Practice
With this series, advisors can find a framework for helping clients meet sustainable investing goals.
The Long View Podcast
John Rogers, Jr.: 'Be Willing to Talk About These Uncomfortable Issues'
The Ariel Investments founder and chairman shares his views on diversity, equity, and inclusion, value's resurgence, stock-picking, and more.
Are Credit Card Companies Using Your Biases Against You?
How to make smart financial decisions, when offers are designed to know you better than you know yourself.
Q1 2021 Markets Summary: A Change in Leadership Across Stock and Bond Markets
Struggling investment classes and sectors turned in strong performances with hopes for progress against COVID-19.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.