Insightful Insights
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The 60/40 portfolio: Is it dead, or is it dying?
Roger Montgomery
August 5, 2026
For some time now, I have been writing about the fundamental structural shift occurring in global asset allocation, and specifically, the figurative death of the traditional 60/40 portfolio.
For many years, the typical approach to wealth management and balanced portfolios was to allocate 60 per cent to growth equities for potential capital gains and 40 per cent to public bonds to provide stability and income.
When a recession struck and equity markets ran into headwinds, central banks cut interest rates, driving bond prices higher and shielding portfolio returns by offsetting stock market losses. continue…
by Roger Montgomery Posted in Aura Group, Economics, Insightful Insights, Investing Education, Market commentary, Market Valuation.
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Seeing red? Look at the bigger picture
Roger Montgomery
August 5, 2026
In this week’s Video Insight, I explain why market volatility is a normal part of investing. While market pullbacks can feel unsettling, history shows they’ve often been temporary and have regularly occurred even in years that finished with strong returns. The key is staying disciplined and keeping your focus on the long term. continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Insightful Insights, Intrinsic Value, Investing Education, Market commentary, Market Valuation, Video Insights.
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MEDIA
ABC Newcastle Mornings – market concentration risks
Roger Montgomery
August 4, 2026
I joined Kylie Morris on ABC Newcastle Mornings to discuss the recent increase in market volatility and the shift underway beneath the surface of equity markets. We explored how years of momentum-driven investing and record inflows into index funds have fuelled the outperformance of a handful of large technology stocks, and why that trend may now be reversing. We also discussed the next phase of the artificial intelligence (AI) investment cycle, where investors are becoming more selective about which businesses are likely to benefit, as well as the sharp correction in South Korea’s technology sector as a reminder of the risks that can emerge when markets become concentrated.
Tune in from 33:30 here: ABC Newcastle Mornings continue…
by Roger Montgomery Posted in Economics, Insightful Insights, Market commentary, Market Valuation, Radio.
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A bullish investor’s reminder
Roger Montgomery
July 31, 2026
Every time the stock market stumbles a percentage point or two, headlines invariably scream the same ominous question: Is the big market crash finally here?
It’s easy to sympathise with investor nervousness, despite the S&P500 being less than three per cent from all-time highs. Tensions overseas are triggering spikes in energy prices as strategic reserves are depleted, inflation persists at rates well above central bank preferences, interest rates remain unpredictable, and tech valuations and AI-related spending seem perpetually stretched.
But look beneath the surface of recent market pullbacks, and a different picture emerges.
It helps to understand the mechanics of market volatility, which isn’t about predicting the exact day a dip will happen, but rather recognising the difference between run-of-the-mill turbulence and structural damage. continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Global markets, Insightful Insights, Investing Education, Market commentary, Market Valuation.
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Right now, concentration is your portfolio’s biggest threat
Roger Montgomery
July 30, 2026
On the surface, markets appear remarkably resilient, so if you’ve felt a sense of calm looking at your portfolio performance lately, you aren’t alone.
But look beneath the surface and the structural fragility you’ll see in valuations, government debt, and global trade makes holding a narrow, concentrated equity portfolio (including any portfolio largely invested in index ETFs) one of the more dangerous bets an investor can make right now. continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Global markets, Insightful Insights, Intrinsic Value, Investing Education, Market commentary, Market Valuation, Popular, Technology & Telecommunications.
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WHITEPAPER
THE PROPERTY RUG PULL
Discover how proposed changes to negative gearing, Capital Gains Tax and holiday home tax rules could reshape property investing, and why investors may consider private credit as property returns become less certain and tax advantages diminish.
READ HERE -
Summarising my current AI thesis – Part 2
Roger Montgomery
July 27, 2026
How to respond
Across my articles and media commentaries, I have emphasised that preparing for an artificial intelligence (AI) re-pricing is not about timing a top or shorting tech, but rather about protecting capital through discipline, factor balance, and liquidity.
There are five primary strategies to insulate an investment portfolio from an AI re-rating:
- Diversify away from equity index heavyweights
Broad, passive equity indices (such as the S&P 500 or Nasdaq) are historically concentrated. Passive flows into index funds mean a significant portion of an investor’s exposure is tied to six or seven AI-driven mega-caps.
Rebalance away from broad index funds that leave up to 60 per cent of equity risk tied to the AI trade. Investors might also consider locking in recent gains and diversifying equity exposure across unsung, non-AI themes. continue…
by Roger Montgomery Posted in Aura Group, Economics, Insightful Insights, Investing Education, Manufacturing, Market commentary, Market Valuation, Technology & Telecommunications.
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Summarising my current AI thesis – Part 1
Roger Montgomery
July 27, 2026
Last week, Google reported its first ever quarter of negative cash flow, surprising analysts who thought Q1 2027 would be when pressure on cash flows could seriously emerge, and causing the share price to plunge more than seven per cent.
With the clear exception of Tesla, most of the Mag 7 once deserved high earnings multiples because they were asset-light businesses with competitive advantages that didn’t require money to be defended. The artificial intelligence (AI) race has quickly eroded those moats and their characterisation as asset-light, because, over the last two years, they have had to spend hundreds of billions building data centres to remain competitive. continue…
by Roger Montgomery Posted in Economics, Insightful Insights, Manufacturing, Market commentary, Market Valuation, Technology & Telecommunications.
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Why cheaper AI doesn’t mean easy profits
Roger Montgomery
July 24, 2026
If you’ve been following the technology headlines, you might be confused by two seemingly contradictory statements. The first is that artificial intelligence (AI) is becoming dramatically cheaper to run, and the second is that tech companies are spending more money on AI compute than ever before.
How can we reconcile these statements, and what does the conclusion mean for companies like Pro Medicus (ASX: PME), Xero (ASX: XRO), NEXTDC (ASX: NXT), Megaport (ASX: MP1) and others?
If the unit price of AI is plummeting, shouldn’t the overall costs be going down? And if AI software is taking over the world, shouldn’t every startup building an AI application (App) be printing money?
To help explain the apparent dichotomy, you need to understand a 160-year-old economic concept called Jevons Paradox that’s currently being referenced everywhere and said to be driving the entire AI industry. continue…
by Roger Montgomery Posted in Companies, Energy / Resources, Insightful Insights, Manufacturing, Market commentary, Market Valuation, Technology & Telecommunications.
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MEDIA
Ausbiz – The ‘profitless rally’
Roger Montgomery
July 23, 2026
I joined Juliette Saly on Ausbiz to discuss how the rise of passive investing is reshaping markets. With ETFs and index funds now dominating trading, quality-focused active managers are struggling as money flows into the biggest index constituents regardless of valuation or fundamentals. While this trend may continue for some time, market cycles eventually turn, and when they do, companies with strong fundamentals, high-quality balance sheets and durable cash flows are likely to come back into favour.
Watch the episode here: The “profitless rally” Roger thinks could end badly continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Global markets, Insightful Insights, Investing Education, Market commentary, Market Valuation, TV Appearances.
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A crisis of quality – What’s wrong with active management?
Roger Montgomery
July 23, 2026
When I wrote Value.able in 2010, ‘Quality’ as an investing factor was gospel, a foundational truth: buying fundamentally superior businesses at reasonable prices and holding them over the long run was the surest path to wealth creation.
Individuals like Warren Buffett, Charlie Munger, Mohnish Pabrai, Seth Klarman, Howard Marks and Terry Smith proved, over decades, that Quality rules. Superior Return on Capital Employed (ROCE) or Return on Equity (ROE), high gross margins, and consistent Free Cash Flow (FCF) conversion inevitably compounded a company’s equity, and ultimately produced outsized returns for investors in those businesses. continue…
by Roger Montgomery Posted in Economics, Editor's Pick, Insightful Insights, Investing Education, Market commentary, Market Valuation.
