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Investing Specialists

Weekly Wrap: Inflation Fears, SPACs, Morningstar Medalists

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.

I told you so--sort of.

Last week, I noted that great first-quarter earnings plus a strong economy don't necessarily translate into future stock market gains. And what happened this week? The stock market took some knocks, with the major indexes on Wednesday notching their largest one-day losses in quite a while.

Before anyone thinks I have the ability to move markets--or to predict their direction--let me clarify: I specifically said that I don't know whether stocks have more room to run. And I still don't.

But I do know a few things.

For starters, I know that inflation fears drove at least some of the stock market sell-off during the week. Although the Federal Reserve has made clear that it won't allow inflation to run rampant, it has acknowledged that it'll let things run hotter than usual until inflation averages about 2% over an extended period. As such, those worried about inflation--specifically, pre-retirees and those already retired--can consider adding some inflation-fighting investments to their portfolios.   

I also know that given how long it might take for inflation to settle around that 2% level, market volatility may very well persist, or at least rear its head on occasion throughout the rest of this year. Those uncomfortable with market uncertainty might want to confirm that their asset allocations jibe with their time horizons and goals. Or check up on their savings and spending rates.

And lastly, I know that our emotions can get the best of us during times of market turbulence. Don't let that happen. Instead, recognize your biases and keep them in check.

--Susan Dziubinski

Editor's Picks

SPACs Are Here to Stay
They can fuel bubbles, but SPACs themselves are not bubbles, PitchBook finds.

5 Industries That Stand to Gain from Biden's Jobs Plan
But while increased infrastructure spending will create opportunity, the market has already priced in most of these companies' potential.

5 Financial Mistakes Business Owners Made During the Pandemic
Lessons from 2020's school of hard knocks.

15 Top Funds Leading the Way of ESG
These Morningstar Medalists will make you feel good while investing.

3 Utilities at Risk
Regulatory hurdles may prevent these companies from capitalizing on Biden's infrastructure push.

Portfolio Planning and Personal Finance With Christine Benz

Don't Fret About Tax-Law Changes--Yet
How changes to the step-up in cost basis could affect your financial plan.

What's the Right Way to Approach Withdrawal Rates?
Consider your flexibility.

Mutual Funds and Exchange-Traded Funds

Standout Teams Lift the Ratings of These Parnassus and BlackRock Funds
Morningstar analysts rated 851 share classes and vehicles and 203 unique strategies in April.

Morningstar's New World-Stock Categories
Some funds in the new world large-stock value category have really benefited from the change.

An Upgrade for This Excellent Vanguard Dividend Fund
Thanks to its low costs, Vanguard Dividend Appreciation Index now earns our top rating of Gold.

What This Year's Top-Performing Funds Own
Stock holdings favored by 2021's top-performing active funds are dramatically different from last year's.

An Upgrade for This Excellent Vanguard Dividend Fund
Thanks to its low costs, Vanguard Dividend Appreciation Index now earns our top rating of Gold.

What Morningstar Indicators Do and Don't Say About ESG
How to use our metrics to gauge how sustainable a fund is.

The Boy Who Cried Inflation
Persistent warnings about rising inflation have proved to be false alarms. Could this time be different?

5 Charts on the Investor Surge Into Sector Equity ETFs
ARK's ETFs aren't the only beneficiaries.

Stocks

Enterprise Products' Petrochemical Pivot Holds Promise
We see a growth opportunity that could offer valuation upside.

Is There Opportunity in Airlines Stocks?
U.S. airlines turn a corner as travel demand picks up.

10 Superior Dividend Stocks
These stocks are good choices whether you're looking for dividend growth, down-market defense, or inflation protection.

Why It Pays to Diversify by Investment Style
Different styles all have high correlations with the overall market, but that doesn't translate into identical returns.

A Leader in Powersports--on Sale
We think Polaris' high-quality brand can overcome near-term headwinds.

Stock Analyst Updates

BioNTech Reports Strong Vaccine Revenue, Flu Prospects
We've raised our fair value estimate for BioNTech to $139 per share.

Palantir Proves Solutions Are Resonating, Growth Ahead
We are raising our fair value estimate for the narrow-moat company.

Mixed Disney Q2 as Subscribers Growth Slows at Disney+
Revenue fell short of FactSet consensus but operating income came in well ahead of Street expectations.

Airbnb Sees Impressive Demand Recovery
It continued to benefit from the U.S. travel recovery and preference for more staycations.

Rekenthaler Report

David Swensen: The Peter Lynch of Institutional Investing
A genius to admire but not emulate.

Which Is Better or Worse: The Financial Transaction Tax or the Capital Gains Increase?
Assessing the current proposals before Congress.

Advisor Insights

Is the Secure Act Good or Bad for Trusteed IRAs?
Here's a look at what a trusteed IRA is and why it was a "dream product" until the Secure Act came along.

The Long View Podcast

Patrick O'Shaughnessy: 'Custom Indexing Unlocks a Lot of Benefits'
The investor, author, and popular podcast host talks ESG, factor investing, some of his favorite podcast guests, and more.

Sustainability Matters

Investors Have Tools to Combat Global Deforestation
How you can make a change.

Hints of Sea Change in Big Fund Company ESG Proxy Votes
At midseason for 2021 proxy votes, signs of a jump in support.

Commentary

Using Annuities to Mitigate Risk
The Retirement Income Journal editor Kerry Pechter tackles common annuity misconceptions.

Most Requested Stock Quotes

Apple
Microsoft
Amazon.com
Berkshire Hathaway Inc Class B
Facebook

Most Requested Fund Quotes

Vanguard 500 Index
Fidelity 500 Index
Dodge & Cox
Vanguard Total Stock Market Index
Vanguard Dividend Growth

Most Requested ETF Quotes

Vanguard S&P 500 ETF
Vanguard Total Stock Market ETF
SPDR S&P 500 ETF Trust
ARK Innovation ETF
Invesco QQQ Trust


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