“Most macro signals are noise,” Coop said in an interview with ET Now. “They don’t help you make good long-term decisions. What matters more is knowing the right price to pay for equities or bonds — and sticking to it.”
US still dominates, but diversification is growing
Despite rising geopolitical shifts and trade realignments, Coop said global portfolios remain anchored around U.S. markets.
“Investors are realising how concentrated they are in the U.S. — in its dollar, bonds and equities,” he noted. “While some are hedging that exposure, we’re not seeing a big structural shift yet. It’s more about small, tactical moves.”
Artificial intelligence (AI) has been a key driver of recent global flows, he added.
“When AI rallies, everything AI-related rallies — and that pulls in money globally. Professionals benchmarking against those themes struggle to stay diversified.”
India cools, Korea and Brazil look attractive
On emerging markets, Coop struck a measured tone on India, saying valuations have become rich relative to peers.“The heat is starting to come out of the Indian market,” he said. “We currently see more value in Korea and Brazil.”
He added that while China remains inexpensive with decent-quality businesses, its upside is far more limited now compared to 18 months ago.
Behavioural biases cost investors more than fees
Morningstar’s research has long studied why investors underperform the very funds they buy — a gap driven largely by timing and psychology.
“Recency bias makes investors chase performance,” Coop explained. “When markets rise, they pile in; when markets fall, they pull out. That emotional cycle leads to poor timing and lower realised returns.”
Another trap, he said, is confirmation bias, where investors only seek views that match their own, amplifying herd behaviour.
“The antidote,” Coop advised, “is to base your decisions on valuation — whether an asset is trading above or below what it’s really worth — not on its recent performance. That’s how you break the bias loop.”
Bottom line: Stay rational
Coop’s key message to investors: stay rational, not reactive.
Ignoring the noise of daily headlines and focusing on intrinsic value, disciplined asset allocation, and behavioural self-awareness, he said, can make the difference between average and superior returns.
“Markets will always swing between greed and fear,” he said. “What counts is sticking to a process that helps you stay calm when others aren’t.”