{"id":10034,"date":"2026-07-01T09:48:37","date_gmt":"2026-07-01T09:48:37","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=10034"},"modified":"2026-07-01T09:48:37","modified_gmt":"2026-07-01T09:48:37","slug":"staying-ahead-when-the-market-plays-by-new-rules","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=10034","title":{"rendered":"Staying ahead when the market plays by new rules"},"content":{"rendered":"<p><\/p>\n<div>\n<p><iframe loading=\"lazy\" src=\"https:\/\/iframe.iono.fm\/e\/1691247?layout=modern\" width=\"100%\" height=\"170\" frameborder=\"0\" data-mce-fragment=\"1\"><\/iframe><\/p>\n<p>You can also listen to this podcast on iono.fm here.<\/p>\n<p><strong>SIMON BROWN: <\/strong>I\u2019m chatting with Sean Neethling, head of investments at Morningstar. Sean. appreciate the time. A recent note out from you and your colleagues talks around investment success and talking particularly around how markets have perhaps become structurally harder to predict. This isn\u2019t just geopolitical. I\u2019m thinking there\u2019s also technology. Things are changing at rates that are unprecedented \u2013 even from, I don\u2019t know, five, 10, 15 years ago.<\/p>\n<p><strong>SEAN NEETHLING: <\/strong>Yes, Simon. Firstly, thanks for having me on your show.<\/p>\n<p>I think if you look at the world today, the way we look at things at Morningstar there are probably two main forces that are almost reshaping markets. The first is let\u2019s call it geopolitics. We really are moving from a rules-based, almost multilateral system to a more fragmented world, where you are seeing the emergence and the influence of one or two key people in the political space.<\/p>\n<p>So we\u2019re seeing a world where a number of decisions are being made by a small group of leaders, and these decisions can impact markets \u2013 whether it\u2019s equities, bonds, currency or commodities \u2013 in a very pronounced way.<\/p>\n<p>So that\u2019s, let\u2019s say, the first I suppose force that\u2019s mainly shifting \u2013 and predominantly out of the US.<\/p>\n<p>Read:<br \/>Deal-making era threatens multilateralism and democratic accountability<br \/>Beyond the hype: Why the next \u2018Amazon of AI\u2019 is currently behind a locked door<\/p>\n<p>Then I think look at a theme which has been in play for a fairly long time but we\u2019re seeing it accelerating in technology and technological advancements. This is really advances in machine learning and AI, that are accelerating the pace of change across industries.<\/p>\n<p>So what you\u2019re seeing here is that it\u2019s compressing timelines. It\u2019s creating a lot of uncertainty and you\u2019re getting this really narrow grouping of winners and losers.<\/p>\n<blockquote>\n<p>What we\u2019re seeing there is this pace of change which is rapidly accelerating \u2013 and again, in an environment where it\u2019s not especially clear how these technologies will necessarily unlock value in businesses.<\/p>\n<\/blockquote>\n<p>I think those dynamics introduce a lot of uncertainty, a lot of unpredictability that\u2019s difficult to model, especially using, I suppose, additional frameworks.<\/p>\n<p>So I think the toolkit that investors need to rely on now needs to be a lot more deliberate. Instead of trying to be particularly right on something, it\u2019s more important to prepare for those different potential outcomes.<\/p>\n<p><strong>SIMON BROWN: <\/strong>I like that. It\u2019s more about managing probabilities, perhaps, than anything else \u2013 and probabilities because we\u2019re not sure what\u2019s going to play out. But you can sort of learn to adapt and respond.<\/p>\n<p><strong>SEAN NEETHLING: <\/strong>Yes, 100%. But I think the current environment is especially choppy, so trying to predict or speculate or forecast how things are likely to play out is not an especially useful way to spend time. It sounds a bit clich\u00e9, but it\u2019s better to prepare than to predict.<\/p>\n<p>So I think instead of trying to think about specific outcomes, look at the distribution of potential outcomes or probable outcomes. What do those payoff profiles look like in terms of being right or wrong?<\/p>\n<p>Read:<br \/>Investor behaviour, in particular, affects long-term investment success<br \/>Investment fundamentals that outlast headlines<\/p>\n<p>And then most importantly for investors, I think, is how to think about how portfolios behave under different scenarios. So the value of preparation in an environment like this \u2013 and in just being aware and thinking through those different probabilities \u2013 is massively important.<\/p>\n<p><strong>SIMON BROWN: <\/strong>I get that, and I like that. It\u2019s <em>how<\/em> they respond. I imagine it\u2019s also perhaps sort of around breadth, widening the net across maybe asset classes, maybe geographies in particular. A lot of it, I suspect \u2013 well, some of it \u2013 is certainly going to be looking for mispricing. And that\u2019s going to need a wider net.<\/p>\n<p><strong>SEAN NEETHLING: <\/strong>Yes, absolutely. I think again \u2013 another clich\u00e9 \u2013 but diversification is often cited as your only free lunch. In an environment like this it\u2019s massively important to think about <em>how<\/em> you think about that diversification.<\/p>\n<p>So, when you look at different regions around the world, we\u2019ve been in this environment where the US has outperformed for a particularly long period of time despite being optically expensive, and if you choose to invest or under-invest or [have] underweight positions in the US, or not to invest, that is a decision in and of itself.<\/p>\n<p>What you find in an environment like this is there are parts of the world that are especially attractive in terms of being cheap, and there are parts of the world that are more expensive.<\/p>\n<p>Read:<br \/>Invicta hits global diversification milestone as profits climb<br \/>The geographic blind spot in your wealth strategy<br \/>The quiet strength of a diversified portfolio<\/p>\n<p>I think in this type of environment where you do have these uncertainties it doesn\u2019t necessarily mean that you only buy cheap assets or you only avoid or underwrite expensive assets. I think the way you put that puzzle together in a client portfolio is probably one of the more important decisions to make.<\/p>\n<p><strong>SIMON BROWN: <\/strong>It\u2019s less around strong views, and it\u2019s a theme that you\u2019ve been saying gets back to process.<\/p>\n<p><strong>SEAN NEETHLING: <\/strong>Yes, 100%. I think in an environment like this it\u2019s important for investors to stick to their philosophy in terms of how they allocate capital and how they allocate money.<\/p>\n<p>At Morningstar we are fundamental long-term investors, and our framework is anchored on that. Our process is very much iterative. So we learn from things that have worked really well, and when things don\u2019t work out as they should in line with expectations, it\u2019s important to pretty much revisit your assumptions and try to stress-test why things haven\u2019t worked out as expected.<\/p>\n<p>Read:<br \/>Too many investment choices? Why advice matters more than ever<br \/>Fading US dominance could reshape asset returns, say analysts<\/p>\n<p>So I think the investment process and being malleable about that, while making sure that you build robust portfolios, is something in an environment where there is a lot of unpredictability.<\/p>\n<p>And, as I mentioned upfront, you have massive technological change, again plus one particularly influential figure in US President Donald Trump who can shift markets in a very pronounced way.<\/p>\n<p><strong>SIMON BROWN: <\/strong>I hate the phrase \u2018this time is different\u2019, but we really are in a different environment, as you said. One is the president of the US, the other is technology. These really are different times.<\/p>\n<p>We\u2019ll leave it there. Sean Neethling, head of investments at Morningstar, always appreciate the time.<\/p>\n<\/p><\/div>\n<p>#Staying #ahead #market #plays #rules<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You can also listen to this podcast on iono.fm here. SIMON BROWN: I\u2019m chatting with Sean Neethling, head of investments at Morningstar. Sean. appreciate the time. A recent note out&hellip; <\/p>\n","protected":false},"author":1,"featured_media":10035,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[456,33,8185,207,5728],"class_list":["post-10034","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-ahead","tag-market","tag-plays","tag-rules","tag-staying"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/10034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10034"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/10034\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/10035"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}