Boring is beautiful: Why advisors are avoiding the bull market’s hype

Despite the incessant chatter around hot stocks and sky high sectors of the moment, Janus Henderson’s mid-year investing outlook couldn’t be clearer: boring is beautiful. Moreover, this outlook is a continuation of the same conviction the firm publicized for 2026 at the start of the year.

Processing Content

Richard Bernstein, Janus’ global head of macro & customized investing, noted in the report that although financial and betting markets do not serve the same purpose within the economy, “at the midpoint of 2026, it seems clear that there is abnormal speculation in the current economy because investors are equating the two.”

Investors, he added, “would be better served sticking to fundamentals and leaving chance [taking] to the betting community.”

Other firms favor indexes over hot stocks

At present, even the lure of the Magnificent Seven isn’t immune to Janus Henderson’s sidestep. Instead, “equity market segments such as dividends and non-US stocks appear much more attractive than the consensus favorite, the so-called Mag 7, or the broader technology sector,” said Bernstein.

Janus Henderson isn’t the only firm embracing the more boring investments instead of the scene stealers, and many advisors on Team Boring prefer to be in indexes. Matthew Higbie of Birchwood Capital in Loganville, Georgia, wrote in an email that his firm’s preference is to use diversified index funds, calling them “the best way to maintain exposure to the next round of big winners.”

David Foster of St. Louis-based Gateway Wealth Management currently favors “100% plain vanilla indexed ETFs for my clients,” he wrote in an email. “Those ETFs don’t include any sector funds, alternatives [commodities, real estate, etc.] or even high-yield bonds.”

READ MORE: The case for applying an old-school dividend strategy to investing today

To help his firm’s preference for the less sensational investment approach at Duxbury, Massachusetts-based W.H. Cornerstone Investments, William Harris takes clients back to a classic childhood fable. Investing, they are told, is similar to the tortoise and hare, with Wall Street usually cheering on the hare, who ultimately loses the big race to the tortoise that plods along consistently.

“While it’s tough in this speculative market,” he said in an email, “focus must be on broad diversification, disciplined strategic rebalancing and avoiding concentration risk.” 

Cornerstone, he said, likes investments such as the S&P 500 Equal Weight Index, “which spreads exposure more evenly than the traditional market cap-weighted index.”

Keeping clients out of speculative markets

Taking the more sober, rational approach sometimes also requires a bit of clarification and transparency for clients. Part of the issue is that investors, like markets, can get unpredictable at times, and so can their risk preferences, which “swing back and forth from very cautious risk aversion to wild risk taking,” Bernstein said. He used the example of investor hunger for quality dividend-bearing stocks and Treasuries when the bull market started its run and contrasted it to current sentiment.

READ MORE: Amid resurging economic optimism, advisors favor domestic stocks

“Today, when the lines are blurred between capital markets and prediction markets, no level of equity or fixed income risk seems to satisfy gambling cravings,” said Bernstein. “Instead of following the risk-taking herd, we are sticking to the fundamentals that continue to suggest boring investments are quite attractive.”

Harris and his team look to history as a guide when the subject comes up. 

“When clients ask about the latest hot stock, we remind them that investors have been chasing the ‘next big thing’ for centuries,” he said. “Most of the time, the winners are the people who stay disciplined while everyone else is chasing headlines. Boring rarely makes the news, but it has a remarkable habit of building wealth.”

It is also important to be mindful that every client might not favor the outright avoidance approach where headline-making and hot stocks are concerned. There are still ways to help clients scratch the proverbial itch while also keeping them safer from volatility. 

At Daring Greatly Wealth in Scottsdale, Arizona, if Lillian Turner’s clients bring it up, she teaches them to embrace the mantra of going “simple before sexy,” she wrote in an email. After clients have their basics covered such as no or low high-interest debt, a 401(k) match met, or a Roth IRA maxed, then they can turn to the more risky, within an agreed-upon reason.

“I give them permission to get ‘freaky’ with 5-10% of their portfolio,” Turner said. “We typically open a separate ‘fun’ account to help them mentally account for this principle.”