Podcast Summary: The Long View — "The Biggest Risk Investors Face Today"

Hosts: Christine Benz (Morningstar), Susan Chavinski (Morningstar)
Date: August 18, 2025

Overview

In this special crossover episode, Susan Chavinski interviews Christine Benz—Morningstar’s Director of Personal Finance and Retirement Planning and host of The Long View podcast—on the most significant risks facing investors today. Their discussion takes a "long view" on topics from stock and bond allocations, the role of international and dividend stocks, managing behavioral pitfalls, retirement planning, and the enduring value of simplicity. The conversation features practical advice, timely warnings, and memorable commentary on how to navigate the post-boom investing landscape, with a particular focus on the risks of complacency, over-concentration, and ignoring your actual time horizon.

Key Discussion Points and Insights

1. The Biggest Risks Facing Investors Today

Complacency After a Long Bull Run

• Christine Benz (02:43):
  “The big one is complacency. ...We've had such an incredible run for U.S. stocks...I think there's a tendency to believe that it will ever be thus...My worry is that investors will lean a little bit too much into that and not think that they need anything else in their portfolios.”
• Catalysts for Downturn: Potential slowing economic growth signaled by recent jobs reports and consumer spending slowdowns.

2. Asset Allocation: Age & Time Horizon

• Age as a Guide (04:32):
  “The age 50 to me is a really neat cutoff point...if you're over 50, I think you want to be realistic about de-risking a portion of your portfolio.”
  • Over 50: Start de-risking with more bonds and cash, build a bulwark of safer assets.
  • Under 50: Focus on growth, global diversification, match U.S./non-U.S. allocation to global market cap (~62% U.S., 38% international).

3. International Stocks: Is It Too Late?

• Recent Recovery and Ongoing Opportunity (06:46):
  “Short answer is...probably not [too late].”
  • Valuation advantage and higher dividends persist.
  • Cycles for international stock outperformance often last several years, not just one.
  • Weakening dollar could be a continued tailwind.

4. Bonds in a Higher-Rate Era

• Christine Benz (08:48):
  “It’s very difficult to get investors to enthuse about bonds these days...But...starting yields set you up for better returns from bonds going forward.”
• Higher yields mean better prospects: Recent dislocation offers better starting points and offers policymakers more tools.

5. Core Investments: Why Use Funds & ETFs?

• Simplicity & Safety Over Stock-Picking (11:14):
  “It’s very simple to assemble an ultra-low cost portfolio of broad market index funds...Another thing: as we age, we’re more likely...to experience some diminishment in our cognitive functioning, and it only makes sense to try to simplify.”
• Active Management Track Record: Underwhelming, especially with large-cap U.S. stocks.

- Defining Core Holdings (12:54):

• U.S. total market and non-U.S. total market index funds: “You have the whole world there.”

- Individual Stocks as Satellites (13:34):

• Avoid duplication with mutual funds (i.e., don’t only own what’s already big in your index fund).
• “Your superpower is your ability to be patient, your ability to lean into that long time horizon.”

6. Dividend Stocks: Role in Portfolios

• Why Retirees Love Them (15:27):
  “The bird in the hand is very comforting once you are separated from your paycheck...Dividend paying companies typically are more financially stable.”
  • Less volatile in downturns
  • But: Even strong dividend payers can cut payouts in crisis (e.g., 2008 bank cuts).
  • Recommendation: Pair dividend stocks with cash and bonds for resilience.
• Types to Favor (18:02):
  • “Dividend growth strategies...you are getting a very stable, high quality basket of companies that does tend to be less volatile.”
  • Still, keep some exposure to non-dividend payers for balance.

7. Recognizing and Managing Risk

• Complacency With Age (19:31):
  • “There's a lot of complacency among older adults...We feel more risk tolerant, but our actual capacity to absorb risk has gone down.”
  • Emphasizes the importance of preparing “a runway of safer assets in volatile markets.”

8. Behavioral Mistakes: Recency and Chasing Trends

• Christine Benz (21:57):
  “It's that recency...to want to believe that whatever we've seen in the market will continue...another one is kind of crowding in whatever has been the hot part of the market.”
  • AI and mega-cap tech stocks are current “hot” sectors; need to diversify beyond them.
• Emotional Control & Set-It-and-Forget-It (23:18):
  • “Your portfolio is like a bar of soap and the more you touch it, the smaller it’s going to get.”
  • Advocates for annual review, minimal tinkering.

9. The Long View Podcast & Book

Podcast Themes (24:47):

• Emphasizes personal finance, retirement planning, and the "why" behind investing.
  • Standout guests: Carl Richards (emphasis on “What’s it all for?”), J.L. Collins (simplicity), Laura Carstensen (longevity = relationships and purpose matter).

Book Insights (28:39):

• Go beyond portfolio mechanics:
  • Track and forecast spending pre-retirement.
  • Maximize non-portfolio income (Social Security, pensions).
  • Consider non-financial aspects—purpose, relationships, routines.
• Highlight: Dr. Jordan Grummet’s advice for “small p” purpose in retirement (31:13):
  “Maybe you just do some smaller p purpose things that you really love, whether it's cooking a great dinner...or reconnecting with some childhood hobby.”

10. Bogleheads Community & Simplicity

• Christine Benz’s Involvement (33:39):
  • Advocates for simple, low-cost investing.
  • Upcoming Bogleheads conference (Oct 17-19, 2025), San Antonio.

Notable Quotes & Memorable Moments

• “The age 50...is a really neat cutoff point where if you’re over 50, I think you want to be realistic about de-risking a portion of your portfolio.”
  — Christine Benz, 04:32

• “Your portfolio is like a bar of soap and the more you touch it, the smaller it’s going to get.”
  — Christine Benz, 23:18

• “Active managers haven’t been able to add a lot of value...I would kind of question my own ability to...build a basket of individual stocks that will outperform.”
  — Christine Benz, 11:14

• “We feel more risk tolerant, but our actual capacity to absorb risk has gone down.”
  — Christine Benz, 19:31

• On behavioral errors:
  “Inertia is the biggest behavioral force by far, and I have exhibited this in my own financial life. So, I think...benign neglect is a pretty good investment strategy a lot of the time.”
  — Christine Benz, 37:54

Rapid-Fire Round (35:29-39:03)

• Investing rule to never break:

  • “Have a goal. Never invest without a goal in mind.” (35:46)

• Rule Christine breaks herself:

  • Underweight bonds, hold too much cash: “Don't do that. It's something I do, but don't do that.” (36:06)

• Recommended book:

  • The Best of Jonathan Clements — proceeds go to charity for Roth IRAs for young adults. (36:39)

• Most overrated investing concept:

  • That investors are always “the dumb money”—data suggests inertia is often benign. (37:54)

Time-stamped Highlights

• Complacency as greatest risk — 02:43
• When and why to de-risk — 04:32
• International stocks: still time? — 06:46
• Bond yields and allocation rationale — 08:48
• Why index funds should be your core — 11:14
• Dividend stocks: strengths and caveats — 15:27
• Behavioral mistakes and biases — 21:57
• Set-it-and-forget-it investing — 23:18
• Holistic retirement planning advice — 28:39
• Rapid fire Q&A — 35:29

Conclusion

This episode is a masterclass in perspective for long-term investors of every age. Christine Benz warns against the risks of complacency and recency bias, advocates for international diversification, and stresses the importance of age-appropriate de-risking. She demonstrates the value of simplicity, minimal tinkering, and finding personal purpose beyond the numbers. Whether you’re a retiree, pre-retiree, or just starting out, her advice—grounded in data, experience, and a touch of philosophy—is practical, reassuring, and right on trend with today’s turbulent market.