278. How to Build a Balanced Portfolio and Navigate Market Volatility: Your investing questions answered
Web title: How to Build a Balanced Portfolio and Navigate Market Volatility
Full episode description:
Building a balanced portfolio can feel challenging when markets are volatile, artificial intelligence is reshaping investment opportunities, and financial priorities change throughout our lives. Whether you're just starting to invest or have years of experience, understanding how to manage risk, identify opportunities and stay focused on long-term goals is an important part of investing.
In this Ask Me Anything episode of The Bid, host Oscar Pulido is joined by Kristy Akullian, Head of Global Portfolio Solutions Investment Strategy for the Americas at BlackRock, to answer investing questions submitted by listeners. From building wealth in your 20s and 30s to understanding bonds, futures and AI investing, Kristy explores the fundamentals of constructing a balanced portfolio and navigating changing market conditions.
The conversation examines why time in the market can matter more than trying to time the market, how bonds can help diversify investment risk, and what investors should consider when evaluating AI-related companies. Kristy also discusses how growing AI investment may affect other sectors of the economy and why financial discipline and diversification remain important when building a balanced portfolio.
Key insights:
How to start investing early: Why financial goals and investment time horizons matter when building wealth.
How to navigate market volatility: Why emotional discipline and a long-term perspective can help investors avoid common mistakes.
Why bonds matter in a balanced portfolio: How interest rates, duration and credit quality affect bond investments.
How futures work: Why investors and businesses use futures contracts to manage exposure and hedge risks.
How to evaluate AI investing opportunities: Why earnings, balance sheets and business fundamentals matter when assessing AI-related companies.
Why diversification matters: How concentrated AI investment and competition for capital can influence broader markets.
Sources: Bloomberg 2026
Keywords: balanced portfolio, market volatility, investing for beginners, long-term investing, AI investing, bond investing, portfolio diversification, financial planning
Written Disclosures: This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener. Reference to the names of each company mentioned is merely for explaining the investment strategy and should not be construed as investment advice or recommendation. For full disclosures, visit blackrock.com/corporate/compliance/bid-disclosures.
<<TRANSCRIPT>>
Oscar Pulido: Investing can raise a lot of questions, whether you're just getting started or have been investing for years.
How do you know if you're on track financially? How do you separate a good AI investment from the hype? And what's the biggest mistake even experienced investors make?
Welcome to The Bid, where we break down what's happening in the markets and explore the forces changing the economy and finance. I'm Oscar Pulido.
Today, we're doing something a little different. We're handing the microphone over to you, our listeners, for another Ask Me Anything episode. To help me answer them, I'm joined by Kristy Akullian, head of Global Portfolio Solutions Investment Strategy for the Americas. We'll discuss your general investing questions from how to start building wealth and navigating market volatility to understanding bonds, futures, and the opportunities and risks surrounding AI.
Kristy, thank you so much for joining us on The Bid
Kristy Akullian: Thank you so much for having me. It's been a long-time goal
Oscar Pulido: Well, this is your first time on the podcast, and we appreciate you joining us. We're putting you in an interesting spot. This is one of our Ask Me Anything episodes, where we've gone out to our listeners and we've asked them to send in their questions just about general investment trends or, or questions that they have, and we're asking you to answer them. So, we're going to start with a question that I think will resonate with a lot of our listeners, particularly those who are just beginning their investing journey. And our first question is going to come from Yash in Edinburgh
Yash: Hi, my name is Yash. I'm twenty-two years old. I'm from Edinburgh. One of the things I wanted to know is just in the global markets these days, everything's changing all the time. as a young person myself looking to start getting into investing. What's the best approach forward, and how can I consistently compound my money that can help me for the future but also help me now?
Oscar Pulido: So, Kristy, what would you say to Yash?
Kristy Akullian: Perfect. So, my first time here, and it's really a trial by fire, right? We, we- ask me anything. No, this is a perfect place to start. I think as investors are really thinking about investing, the most important thing you can do is start early, and I would also say give your money different jobs. I think so many of us hear from financial professionals, and we get the in- advice to start investing for your retirement right away.
If you're 22, that can feel so far away. I'd also like to encourage people to, to start thinking and investing towards near-term goals as well, near and medium terms. Do you want to buy a car in the future? Do you want to buy a house in the future? Those are going to be investments that have different levels of risk than what you should be taking now if you're 22 and you're thinking about retiring in 40-plus years. So, start early and have a plan and have a different plan for different goals.
Oscar Pulido: I like that. Give your money different jobs, which I think is what you're saying is that you're going to have different goals over different time horizons, and therefore can invest along those different time horizons. getting started early, of course, is important, but everyone's financial situation is going to be different.
And that brings us to our next question from Andrea, who's wondering how to measure financial progress when we're all at different stages of life
Andrea: Hi, I'm Andrea. I'm 30 years old, and I hear a lot of people talking about investing and building their portfolio at my age, but we're all just at different stages of life. So, I'm curious, how do I know if I'm doing well financially at my age, and what should I be prioritizing when it comes to investing in my 30s?
Kristy Akullian: Yeah. That's a great question. And, you know, as we get a little bit older, I think that we start to, to consider different financial needs as well. You know, it's certainly important that we prioritize those long-term retirement goals, and that we're investing, in that pre- you know, pre-tax investments are so valuable, especially at this age, because we have so much time to compound them. But, you know, again, you know, at your 30s is sort of this critical point where you probably have a little bit more, discretionary money after you've paid the bills than you did in your 20s. I like to say that what gets measured gets managed.
So, it's really important to build in some financial hygiene right now, to set budgets, to set goals about how much you want to invest and see how you can grow that with your income over time.
So yes, absolutely focus on retirement, but now is also that time to start building that muscle memory about setting some money aside every month to maybe do after-tax investing, to be able to put some money aside for some of those shorter-term goals that are going to be here before retirement
Oscar Pulido: You have a way of, coming up with really, memorable one-liners. So, you mentioned what gets, managed gets... Sorry, what gets measured gets managed. And I think here what you're alluding to is maybe just showing a little bit more discipline as you, as you start to go from that very early part of your financial journey into slightly later stage of your financial journey. Now, having a long-term investment plan is one thing, but sticking to it can be another, especially when markets are moving around, which we've definitely seen very recently.
Sergio has a question about something I suspect even the most experienced investors struggle with
Sergio Velez: Hi, this is Sergio Velez. investors are constantly being told to think long term. So how do you balance that advice with the temptation to react to what's happening in the markets today?
Kristy Akullian: Yeah, and so much is happening in markets today. Let's just start by acknowledging that. I think we are in a more volatile, more concentrated period for markets, and so there is even more of a temptation to react to that. I think it's really important to remember that over the last twenty years, twenty-four out of twenty-five of the best ever days in the market came within one month of the worst ever day in the market. So, markets tend to overreact to news as they're processing and digesting new pieces of information.
And typically, you know, we'll see some really sharp selloffs, and sometimes those are followed by really sharp rebounds. So, we as investors need to be a little bit emotionally disciplined about not overreacting as well.
So, we can't get out of the market, at the worst time. w- you know, I think it's really important just to stay in because if you do, you may miss that bounce on the other side. and then, you know, if we're thinking even a little bit long term, just out of some of those day-to-day moves, investors also have to be comfortable with a little bit of volatility because without risk, there's no reward.
So even though markets, you know, if we look at the S&P five hundred as an example, tend to be up about seventy-five percent of the time, and on average, they're up about nine percent, almost every year, we still see about a fourteen percent drawdown. Markets don't just go up and to the right. We have to be comfortable with that, that volatility because it's that risk that brings the reward with it.
Oscar Pulido: Right. And, Kristy, you and I have been doing this for a while, and we know that investing is a full-contact sport. While it can be very rewarding over the long term, it can be a very emotional rollercoaster. And, and what you're saying is those people who can control their emotions are probably going to have a little bit more success.
Let's turn to some of the building blocks of investing. We've talked a lot about stocks, but bonds can also play a very important role in a portfolio. And with interest rates being such an important driver of markets, understanding how they affect bonds can be confusing. Here's Beata with our next question
Beata: My name is Beata. I'm twenty-eight years old, and my question today is around, fixed income. In particular, how do changes in interest rates affect bond prices and yields? and why might bonds with different maturities, durations, and credit quality respond differently to the same changes in the market interest rates?
Kristy Akullian: Yeah, that is an excellent question, and not one that I would say most people know to ask at 28. So, congratulations to Beata for that one. Yeah, I think that a lot of people have looked at bonds as sort of a necessary evil in their portfolio, where they have felt like maybe they weren't giving them much, in terms of returns. But it's important to remember that a balanced portfolio doesn't all move together. And so, bonds can serve as a really important source of ballast, in a portfolio which it doesn't seem as important when equity markets are just going up. but it's certainly when we see those periods of volatility, and where some of the more popular trades like we have seen so far this year come under pressure.
So, the specifics of bond, mechanics, as Beata noted, when interest rates go up, bond prices go down. Bond prices are going to be sensitive to interest rates because, you know, conceptually, if you own a bond that is at a, a 4% interest rate, for example, and interest rates move up to 5%, the new bonds that are being issued now are going to be that much more attractive, so your bond's price is going to fall as a result.
Duration you can think of as just a, a measure of interest rate sensitivity. How sensitive is your bond to changes in interest rate? So longer duration bonds, which tend to have a longer maturity as well, are going to see bigger price swings from even the same, you know, percentage change in interest rates. and then the last part of that too is credit. Just like all of us have a credit score, you know, bonds are going to trade at a level that reflects the ability of the issuer to pay that back. and so, as companies are stronger, with healthier earnings and stronger balance sheets, they will have narrower spreads, a higher credit quality, and then of course that happens in reverse, too. So, bonds are always reacting and responding to both changes in interest rates, which is a little more universal, and changes in, the corporate structure or specific company news as well.
Oscar Pulido: And I agree with you. I think most people in their 20s aren't maybe thinking about bonds in the sort of, detail that Beata's thinking about it. But as you've outlined, they play an important role of ballast in a portfolio and can be a good diversifier to, the stock market, which is often what we find ourselves talking about.
So, we've talked about bonds. There are plenty of other investment tools that people hear about without necessarily knowing how they work. Kristy, if you think Beata was a student of the market talking about bonds, this one's really going to impress you.
This next question is about futures. Bridget has a question about what they actually are and why investors use them
Bridget: Hi, my name is Bridget Odukoia, and one question I've been hoping somebody would explain to me is, what are futures? When would you use them, and why?
Kristy Akullian: I love this question. I spent a lot of my career focusing on equity derivatives, so it warms my heart that anybody cares, especially young people. but yeah, futures go back very far. These are one of the oldest financial instruments in the world. they were originally used as a way for farmers, and agriculture producers to be able to hedge their crops in the future.
At the foundational level, you know, futures are a derivatives contract, and that means that they are a zero-s game. So, somebody has to go long for every short and vice versa. and what they are is just a way to sort of bet on or hedge against future price movements in the underlying. So, there's futures across all different types of financial assets. There are futures on the S&P 500, there's futures on oil, there's futures on pork belly contracts. you could really get spec- as specific as you want. but what they do is let you get exposure to movements in the underlying without necessarily needing to put up the cash to go buy the underlying. So, for a financial future, for example, in the S&P 500, you can get exposure to whatever the movements are in the underlying index over the next three months or six months or nine months if you continue to roll that contract, without needing to have the cash to go buy those underlying stocks.
So, what that means is that futures provide leverage and so there's a lot of questions about leverage right now and what that means, whether it's in levered products, in levered ETFs, we've certainly seen rise. But yes, futures are used for leverage on the long side. But really, I think it's important to remember that they're also used as a hedging instrument for, for many types of investors, whether that is farmers hedging their crops, whether that is, airlines hedging the price of oil prices. It just gives you more certainty today about what price you're going to have to pay tomorrow.
Oscar Pulido: Right, and futures, as you mentioned, are a, a derivative, so we're getting into some, more technical areas, and like you mentioned, not just individual investors who could use them to express a view, but you mentioned, in the agricultural sector or airlines in the industrial sector that are using it as a way to manage risk in their businesses.
Kristy, we weren't going to leave this conversation without a question about artificial intelligence. AI has attracted enormous attention and investment, as you know, but not every company associated with the technology will necessarily be a winner. So, here's Alex in London, who wants to know how investors can separate the opportunities from the hype
Alex: Hi, I'm Alex from London, and my question is just regarding AI stocks. How can an investor differentiate between a value AI stock or an AI company that's simply riding the wave and will ultimately prove to be a poor investment?
Kristy Akullian: Yeah, and that it's an excellent question, especially because the history of the AI trade has evolved very quickly. If we look at '24 and '25, it feels like almost anything that was AI or AI adjacent was moving up, and everything was sort of riding that wave, right? I think 2026, this year so far, we've seen a real differentiation in terms of how investors are treating different parts of the AI stack. I think earlier this year, the first hint that we got of that was this very large discrepancy between the performance of software and the performance of hardware. and hardware obviously being necessary to the build-out of AI, whereas software came under pressure as potentially being replaced by it.
That was phase one maybe of this differentiation. As we, we moved over the course of the year, I think investors have increasingly been paying attention to who's writing the checks and who's cashing the checks. So, what are the companies that are responsible for the AI build-out? This can be some of the hyperscalers, some of those biggest companies that we know that make up the biggest portion of the indices as well, versus, you know, maybe some of the memory chip companies, some of the semiconductors that are needed to, to build out. And then more recently, I think where we are now in terms of this, you know, to answer the question and get a little more specific in terms of into how investors are finding value in the AI chain, it's really about what companies can do well in higher interest rates. So that's the flush-out that we're seeing here a little bit, where higher quality AI companies are being rewarded right now, the ones with stronger balance sheets and stronger earnings, where some of the lower quality, more speculative parts of the AI market have really been punished recently.
Oscar Pulido: And that speaks to market volatility, and I think what you're saying is that investors are becoming a bit more discerning about, where they invest, along this AI theme, and therefore why we're seeing some dispersion in the marketplace across many different sectors and, and regions of the world.
We're going to stick with AI. We've seen companies committing significant amounts of money to building the infrastructure and technology behind it. You mentioned, the CapEx. But what does that mean for the rest of the economy? Mackenzie has a question about whether all that investment in AI could be coming at the expense of other sectors
Mackenzie: Hi, my name is Mackenzie, and I have the following question: To what extent do you think AI is crowding out spending from other sectors of the economy, and what impacts could this have for our economies in the future?
Kristy Akullian: Yeah. When we go and talk to investors right now, increasingly the conversation isn't just how do I get exposure to AI, it's what are the knock-on impacts of having so much AI in my portfolio and in the economy more broadly? I do think that there is an element of truth to this. There is certainly a competition for capital. money is fungible, and if it gets all funneled into one place, it's not going to somewhere else by definition, right? So, I do think that, you know, we've seen the reflection of some of that competition for capital, is that we've seen yields rise. as, as more investors are, are trying to, to fund some of that AI build-out, it's pushing up the cost of capital for other industries as well. So, I think, you know, it, it doesn't necessarily signal to me that, we are crowding out all other investments, but what it does signal to me is that there is a higher bar and a higher required rate of return on investment required right now. And it also means, really importantly for investors, that portfolios are getting more concentrated and there's more need to seek outside sources of diversification that may be away from some of this AI spending as well.
Oscar Pulido: And in fact, we recently talked to Carrie King and Alex Brazier about, just the interesting exercise of diversifying beyond this AI theme. And, you know, they talked about things like the healthcare sector and maybe market neutral strategies. But I'm sure, Kristy, if we had more time, you'd probably tell us there's, there's an even longer list to, to have to evaluate.
Well, we've, we've taken quite a tour. We've talked about the basics of getting started with investing. We've talked about bonds, futures. We've, we've talked about the AI theme. But I want to take us back to a question now that is really about the fundamentals, because no matter how much experience you have, there's always something to learn. So, here's N’tika with our final question
N’tika: What's one thing about investing that you think even experienced investors get wrong?
Kristy Akullian: I think one of the most important challenges that investors face is just trying not to get too cute with timing the market. You know, when we look at the
totality of investment returns over time, we find that it, you know, what you can spend in terms of how much time in the market is so much more important than whether you got the exact day right in terms of trading in or out of a certain theme
Oscar Pulido: And I think that's, great insight. Timing the market is very difficult, no matter what your level of experience is. So, Nitika, stay invested over the long term seems to be, like, the best thing that you can do. Kristy, I actually have one more question. This comes from Oscar in New York: How did you enjoy your first appearance on The Bid?
Kristy Akullian: It was wonderful and painless, I have to say. It's great to see how the, how the magic happens behind the scenes
Oscar Pulido: Well, we put you in the hot seat. We threw a lot of random questions at you from our, listener base, and thank you for educating us on a wide variety of topics. We look forward to having you back. Thanks for joining us on The Bid.
Kristy Akullian: Thanks so much for having me
Oscar Pulido: Thanks for listening to this episode of The Bid. If you've enjoyed this episode, check out our recent Ask Me Anything episode on inflation. We've put the link in the show notes, and make sure to subscribe to The Bid wherever you get your podcasts
<<SPOKEN DISCLOSURES>>
This content is for informational purposes only and is not an offer or a solicitation. Reliance upon information in this material is at the sole discretion of the listener. Reference to the names of each company mentioned is merely for explaining the investment strategy and should not be construed as investment advice or recommendation. For full disclosures, visit blackrock.com/corporate/compliance/bid-disclosures
MKTG1126-H-6099459-EXP1127
