The Stock Exchange of Thailand (SET), revealed that throughout 2025 many investors may have felt that their investment portfolios generated good returns, especially from technology and artificial intelligence (AI) stocks. However, this short-term outstanding performance may inadvertently hide asset concentration risk.
If investors do not regularly review their asset allocation, a portfolio that seems strong today may become vulnerable when market conditions change—particularly in 2026, which faces uncertainties from the global economy, interest rates, and the technology stock cycle.
Therefore, to prepare for 2026 and ensure investment portfolios remain balanced and resilient to volatility, Morningstar has proposed simple yet practical portfolio management guidelines for general investors through five main techniques:
1. Adjusting asset allocation to align with the initial investment policy—such as a 60/40 portfolio (60% equities, 40% fixed income). After a strong surge in equities increases their portfolio proportion, rebalancing—either by selling overweight assets or adding to underweight assets—reduces potential loss if the market overturns.
2. Increasing bond allocation to buffer the portfolio—especially for investors approaching or over 50 years old. Morningstar recommends raising the proportion of high-quality, short- to medium-term bonds and some cash to lessen the impact of equity market volatility and preserve long-term financial goals.
3. Increasing non-US stocks to tap markets with less expensive valuations, as Non-US equities are recovering and remain more reasonably priced than the U.S. markets. Increasing international equity allocations diversifies country and currency risks while opening return opportunities from markets that may outperform in the future.
4. U.S. market-based portfolios tend to concentrate in mega-cap and technology stocks. Adding value equity funds and small-cap stocks helps diversify risk and adds upside from stocks that haven’t yet surged in the past round.
5. Dividend stocks in traditional economy sectors such as utilities, finance, healthcare, and consumer staples often move differently from tech stocks. Holding dividend stocks reduces portfolio volatility and enhances total long-term returns.
In summary, 2026 may not be the year to rely on complex financial instruments, but instead a year for investors to “review their own portfolios” and evaluate their balance. If portfolios are becoming concentrated, reallocating into a variety of assets will allow investment growth to be more stable and sustainable in the long term.
