Seated alone at a table, Barajas noticed a man in his mid-30s approach. Placing his hand on Barajas’ shoulder, the man asked, “Is everything O.K.?”

For some reason, Barajas decided to spill his heart out to the stranger, who was wearing a Hawaiian shirt and khaki pants.

“My daughter was just born and she’s the love of my life,” Barajas replied. “But I just lost two loves of my life and it doesn’t seem fair.”

From that initial exchange, the pair engaged in an intense 30-minute conversation about coping with loss and living with purpose.

“I was very vulnerable,” recalled Barajas, now a certified financial planner in Irvine, Calif. “I looked sad. I hadn’t eaten in 24 hours. I think I was in shock from everything that was happening in my life.”

The stranger, Rick Warren, mentioned that he was a pastor of a small church. Thanks to his gentle questioning and attentive listening, he established quick rapport with Barajas.

At the time, Barajas worked at an accounting firm. He confided in Warren that he wasn’t entirely satisfied with his job.

“If you’re not fulfilled, maybe you have to do something bigger,” Warren told him. “Maybe you can find purpose in something bigger.”

Barajas started to rethink his professional priorities. He realized that Warren was encouraging him to look beyond the safe confines of his current job to make a greater impact by doing something more meaningful. “You never see a U-Haul behind a hearse,” Warren said.

Warren’s comment struck a chord with Barajas: If you can’t take your material possessions with you after you die, then why focus on acquiring more of them?

In that moment, Barajas knew he needed to find purpose in his work — and not continue on his current path. He left the café with a newfound determination to reset his career. He decided that he wanted to assist people with modest income to make smart financial decisions.

As a result, Barajas launched his own financial planning practice. Three decades later, he couples his business as an adviser with teaching and writing about financial planning. He’s the author of five books on entrepreneurship and personal finance, including “Small Business, Big Life.”

Warren went on to widespread fame after the publication in 2002 of “The Purpose Driven Life,” which became an international bestseller. Barajas wasn’t surprised: He had heard Warren share some of the same wisdom in their conversation and found it memorable.

Years after their chance encounter, Barajas visited Warren’s Saddleback Church in Orange County, Calif. — which had grown into an evangelical megachurch — and the pastor baptized him. While Warren didn’t remember the details of their heart-to-heart talk, Barajas says Warren enjoyed catching up with him and hearing about how the conversation had altered the course of Barajas’s career.

“His words in that café resonated with me so much,” Barajas said. “This guy changed my life.”

More: ‘I promised myself I’d never be that broke again.’ This financial adviser’s family inherited $1.4 million and quickly lost it all.

Also read: Losing her father on 9/11 led this woman to help people manage their money and gain financial security

That’s according to an analysis conducted by Research Affiliates, the investment firm headed by Robert Arnott. To show the precarious position of the market’s “top dogs,” he calculated what happened over the decade of the 1980s to the 10 largest publicly traded companies at the beginning of that 10-year period. Eight of the 10 were not on 1990’s top-10 list, and all 10 on 1980’s list underperformed the world stock market over the subsequent decade.

Arnott found that the 1980s were not unique. He reached a similar result for the top stocks of the 1990s, 2000s, and 2010s. On average, a stock on any of these lists underperformed the market over the subsequent decade. In addition, there was between a 70% and 80% chance that any given stock would not be on the comparable list one decade hence.

Arnott illustrated these top companies’ underperformance in another way as well: He constructed a hypothetical portfolio that each year owned the world’s 10-largest companies. The performance of this portfolio is plotted in the chart below. Over the 40 years from the end of 1980 through the end of 2020, this portfolio lagged a buy-and-hold by 1.8 annualized percentage points.

Numerous investment lessons can be drawn from Arnott’s fascinating results. One is that cap-weighting is not the optimal weighting scheme for your portfolio. Equal-weighting is one obvious alternative, and it has beaten cap-weighting: since 1971, according to data from S&P Dow Jones Indices, the equal-weighted version of the S&P 500
SPX,
-0.72%
has outperformed the cap-weighted version by 1.5 annualized percentage points.

Arnott believes there are even better ways of weighting stocks in an index beyond equal weighting. His firm maintains a number of so-called fundamental indices that base a stock’s weight on fundamental characteristics such as sales, cash flow, dividends and book equity value.

Valuing a cap-weighted market

But there’s another investment implication of Arnott’s data that I want to focus on: His results highlight the difficulties determining the valuation of a lopsided market. Consider the S&P 500 currently, in which just six stocks — Apple, Microsoft, Alphabet, Amazon, Tesla
TSLA,
-6.10%
and Meta Platforms — account for 26% of the index’s total market cap. Imagine a situation in which those six are overvalued while the other 494 stocks, on balance, are more fairly valued. In that case, the valuation ratios for the S&P 500 as a whole could paint a skewed picture.

This situation isn’t just hypothetical. The largest six stocks currently have an average price/earnings ratio of 62.0, according to FactSet, more than double the average across all stocks in the S&P 500 of 29.1 and almost triple its median P/E ratio of 21.4.

It’s possible, therefore, that the stock market isn’t as overvalued as we would otherwise think by focusing on valuation ratios for the S&P 500 as a whole.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com

Become a smarter investor. Sign up here to get MarketWatch’s best mutual funds and ETF stories emailed to you weekly!

More: ‘When should I sell Amazon?’ These pro tips can help you dump your stock market darlings

Also read: If the S&P 500 can’t hit new highs, brace for fresh selling

James Knightley, chief international economist at ING, put a positive spin on the latest report. From the low point of the first quarter of 2020, household wealth has surged by $35.5 trillion. Combine this wealth rise with employment growth, and wage gains, and the U.S. consumer looks to be in good shape. The “further massive accumulation of wealth only adds to the potential spending ammunition of the household sector, which gives us more confidence that the U.S. economy can expand by more than 4% in 2022,” says Knightley.

Scott Grannis, author of the Calafia Beach Pundit blog and former chief economist for Western Asset Management, had a different interpretation. He pointed out that while liabilities of households have grown 21% from their 2008 peak, net worth has more than tripled. After adjusting for inflation, household net worth has increased 11 fold over the past 70 years.

Another way to look at it — adjusting for inflation and population growth, net worth per capita has soared from $72,000 to $432,000 over the last 70 years.

Both charts, he noted, are running ahead of their long-term trend line. “This could be a replay of what we saw in 2000 and 2007, when some markets got very overextended. By that I mean that for the next several years a mere reversion to trend would mean very modest returns for investors,” he said.

Those low returns could materialize from inflation. “It would not be surprising to see net worth fall below its long-term trend, as it did during the high-inflation 1970s,” he said. With inflation running at 7%, the average interest rate on federal debt at about 2%, the real value of federal debt is falling by about 5% a year.

“In other words, inflation is subtracting over $1 trillion of the real value of federal debt outstanding every year at the same time inflation is boosting government revenues and nominal GDP. This means that the private sector is effectively paying an additional $1 trillion per year in taxes to the federal government (aka the inflation tax),” he said.

The buzz

The key report of the day is the November consumer-price index, due at 8:30 a.m. Eastern, with expectations for a 0.7% monthly rise to take the year-over-year reading to 6.7%. There’s also the preliminary University of Michigan consumer sentiment index for December due for release.

CEO Elon Musk continued selling shares in Tesla
TSLA,
-6.10%,
taking his sales to nearly $12 billion, though his exercise of options has meant his overall stake in the electric-vehicle maker has risen.

Oracle
ORCL,
-0.19%
shares jumped 10% in after-hours trade, after the database giant beat earnings and sales estimates and authorized a $10 billion stock buyback.

Costco Wholesale
COST,
-1.09%
topped earnings expectations as it reported 15% comparable-store sales growth.

Online pet food seller Chewy
CHWY,
-6.32%
reported a wider-than-forecast loss for the fiscal third quarter.

Getty Images said it will merge with special-purpose acquisition company CC Neuberger Principal Holdings II
PRPB,

in a deal valuing the photo service at $4.8 billion, or 15.2 times estimated 2022 adjusted earnings before interest, tax, depreciation and amortization.

The markets

After the first down day in four sessions, U.S. stock futures
ES00,
+0.43%

NQ00,
+0.44%
were back to a winning posture.

The yield on the 10-year Treasury
TMUBMUSD10Y,
1.515%
was 1.51% ahead of the CPI data.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Top tickers

Here are the top tickers on MarketWatch as of 6 a.m. Eastern.

Ticker	Security name
TSLA, -6.10%	Tesla
GME, -10.30%	GameStop
AMC, -8.93%	AMC Entertainment
TMUBMUSD10Y, 1.515%	U.S. 10-year Treasury
DXY, +0.13%	U.S. dollar index
DJIA, -0.00%	Dow Jones Industrial Average
LCID, -18.34%	Lucid Group
ES00, +0.43%	E-mini S&P 500 futures
NIO, -2.85%	NIO
AAPL, -0.30%	Apple

Random reads

A U.K. court has sided with the U.S. on whether WikiLeaks founder Julian Assange can be extradited, in a ruling likely to be appealed.

These religious leaders in Texas live in lavish, tax-free estates.

Hard to know what’s the headline — that there’s $66 million in prize money for a camel beauty contest, or that some of these camels receive illicit Botox injections.

Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.

Berenberg analysts Adrian Yanoshik and Romain Gourvil initiated coverage on Daimler Truck with a provisional buy rating and 35 euro price target. “Daimler Truck’s margins have credible upside from a turnaround already under way in Europe. The group’s self-help gets support from price-mix momentum into a record backlog, with strong freight markets that underpin demand,” they said.

The analysts said they were keeping a buy rating on parent Daimler, with a revised 85 euro price target to incorporate the spinoff, as they expect Daimler Truck will “re-engage investor interest in Daimler.”

“We forecast underappreciated pricing durability and higher premium market growth over the next several years,” said Yanoshik and Gourvil.

Daimler was the biggest loser on the Stoxx Europe 600 index
SXXP,
-0.24%,
which fell nearly 0.4% to 475.19, with the German DAX
DAX,
-0.20%
and French CAC 40
PX1,
-0.26%
down 0.3% each. The FTSE 100 index
UKX,
-0.06%
was trading flat.

Weaker action in Europe bucked gains for U.S. stock futures, with investors on both sides of the pond waiting for November consumer price inflation, which is forecast to rise by the most in decades ahead of the Federal Open Market Committee meeting next week.

Data from Germany on Friday showed prices rising 5.2% on the year, measured by national standards, confirming preliminary data and marking the highest reading since June 1992, the statistics office Destatis said.

In the U.K., October gross domestic product rose just 0.1%, falling short of expectations for growth of 0.4%.

Technology stocks fell in Europe, tracking losses for the Nasdaq Composite
COMP,
-1.71%,
which slumped 1.7% on Thursday. Shares of ASML Holding
ASML,
-3.89%

ASML,
-0.80%
fell 1.5%, SAP
SAP,
-1.23%
dropped 0.7% and Infineon
IFX,
-0.58%
dropped more than 1%.

Apparel makers were also under pressure, led by a 1.3% drop for LVMH Moët Hennessy Louis Vuitton
LVMH,
-0.58%.

Among the biggest gainers, shares of Swedish Match
SWMA,
+6.42%
climbed 6%, after U.S. Senate Democrats were said to be dropping a proposal that would have imposed vaping taxes, The Wall Street Journal reported, citing sources.

“Concerns around the potential impact of the proposed tax changes on NGPs [Next Generation Products] has weighed on the tobacco space over recent weeks and in particular Swedish Match (-21% over the last 3-months),” said Citi analysts Simon Hales and Ravi Sharma in a note to clients.

They said Swedish Match and BAT
BTI,
+0.17%

BATS,
+1.90%
will likely see the most support from that move. BAT shares rose 1.6%.

But the study, published in the American Journal of Preventive Medicine, shows that Black people were eventually using prescription opioids to a similar degree as white people. 

“While the media tends to focus the use of prescription opioids on whites and illicit use on Blacks, our findings show that Blacks were as likely to receive prescription opioids, and [were] also at risk for opioid misuse,” said Chang, a coauthor of the paper with NYU School of Global Public Health Ph.D. student Gawon Cho.

Prescription opioid use among Hispanic adults, meanwhile, stayed lower than other racial and ethnic groups during the 2000s and 2010s, the study found — which may have prevented Hispanic adults from having higher rates of opioid misuse, but could also mean they were undertreated for pain.

The research brief analyzed data from the federal government’s Medical Expenditure Panel Survey between 1996 and 2017. It looked at painkiller use among nearly 250,600 adults without cancer.

The study noted previous research attributing the rise of prescription opioid use to increases in chronic pain, national campaigns to improve pain management, liberalization of prescribing laws, and “aggressive marketing” by pharmaceutical companies. 

The ensuing surge in overdoses resulted in restrictions on prescribing opioids in the 2010s, leading to a decline in prescription opioid use. The NYU study showed that prescription opioid use “showed comparable declines” across race and ethnicity after these prescribing limits were adopted.

Generally speaking, the findings highlight “the need for racial equity in public health responses to the opioid epidemic,” the authors wrote. They cited research that Black Americans experience more stigmatization and arrests around opioid use and have less access to treatment for opioid-use disorders.

The NYU study did not address why people were prescribed opioids or whether opioids were being over- or under-utilized. But new prescription opioids were marketed more heavily in rural white communities in the ’90s, owing to inaccurate racial stereotypes about addiction and pain thresholds, as this New York Times analysis found. And separate studies have found that people of color are less likely to be prescribed medication to relieve pain. 

For example, one cross-sectional study published this year in the journal JAMA Health Forum found that between 2007 and 2014, primary-care doctors more often prescribed opioids for back pain to white patients than to patients who were Black, Asian or Pacific Islander, or Hispanic — suggesting, the authors write, that physicians may have been treating pain unequally during a period when the risks associated with opioid use weren’t as well known.

Read more: Bias in healthcare isn’t limited to race, religion or gender — how to protect yourself

Researchers have also documented the uneven media portrayal of opioid use along racial and ethnic lines: One analysis of 100 popular U.S. news stories from 2001 to 2011, half of which concerned prescription opioid use and half of which concerned heroin use, “revealed a consistent contrast between criminalized urban black and Latino heroin injectors with sympathetic portrayals of suburban white prescription opioid users.” 

“Media coverage of the suburban and rural opioid ‘epidemic’ of the 2000s helped draw a symbolic, and then legal, distinction between (urban) heroin addiction and (suburban and rural) prescription opioid addiction that is reminiscent of the legal distinction between crack cocaine and powder cocaine of the 1980s and ’90s,” wrote the authors of the 2016 paper.

Drug-overdose deaths have accelerated during the pandemic. Some 100,306 people in the U.S. died from drug overdose during the 12-month period ending in April 2021, according to provisional U.S. Centers for Disease Control and Prevention data released last month — the first time there were more than 100,000 deaths in a 12-month period. Experts say opioid-related deaths driven by fentanyl, an extremely potent synthetic opioid, are fueling the record number of fatalities. 

“We are strengthening prevention, promoting harm reduction, expanding treatment, and supporting people in recovery, as well as reducing the supply of harmful substances in our communities,” President Joe Biden said in a statement marking the milestone. “To all those families who have mourned a loved one and to all those people who are facing addiction or are in recovery: you are in our hearts, and you are not alone.” 

Though white people still make up the largest percentage of drug-overdose deaths in the U.S., Black and Hispanic people have represented a rising share of those deaths in recent years, according to an August report by the healthcare think tank KFF. Death rates for drug overdoses increased for all racial and ethnic groups from 2018 to 2020, but Black and American Indian and Alaska Native people experienced the largest increases.

In April, National Institute on Drug Abuse director Nora Volkow laid out “a perfect storm” contributing to overdose deaths involving not just opioids but also stimulant drugs.

“We have people stressed to their limits by decreases in the economy, the loss of jobs, the death of loved ones,” Volkow said. “On the other hand, we see dealers taking the opportunity to bring in drugs such as synthetic opioids and synthetic stimulants and distribute them to a much wider extent than previously seen.”

There is, of course, another 3-row midsize SUV/crossover made by Kia
000270,
+1.55%
—the Telluride. But the Sorento is slightly smaller and therefore lighter. And there isn’t a hybrid version of the Telluride.

The non-hybrid 2022 Kia Sorento lineup is reviewed separately. So is the new Kia Sorento Plug-in Hybrid.

2022 Kia Sorento Hybrid pricing

As the first of two trims, the 2022 Sorento Hybrid S starts with a manufacturer’s suggested retail price (MSRP) of $33,990, plus a destination charge. The higher EX trim is priced from $35,990.

Adding all-wheel drive to the S costs $1,800. Kia charges an extra $2,300 for all-wheel drive in the EX model. Equipping that top AWD version with a few choice options could amount to just beyond $41k.

In the context of 3-row midsize crossovers with hybrid power, the Sorento Hybrid is priced competitively. For example, the Toyota
TM,
-0.94%
Highlander Hybrid starts at around $39k. The Ford
F,
-1.21%
Explorer Hybrid is about $50k. The closest in price is the Hyundai
HYMTF,
-1.71%
Santa Fe Hybrid, also about $34k, but with less standard equipment and just two seating rows.

Before buying, check the KBB.com Fair Purchase Price to see what others in your area paid for their new Sorento Hybrid. From the perspective of resale values, this model doesn’t do as well the Toyota Highlander, but still performs respectably, about level with the Ford Explorer.

Driving the 2022 Kia Sorento Hybrid

Torque is arguably more important than horsepower. It’s the thrust we feel as we accelerate away once the light turns green or dart into a gap in the traffic. Horsepower comes more into play when trying to achieve maximum speed — hardly a sensible thing to do away from a track.

Also read: 3 ways practicing gratitude can help your financial well-being this holiday season

The Sorento Hybrid’s 258 lb-ft of torque, produced by the gasoline engine in tandem with the electric motor, is a substantial portion of push for a family vehicle. There are no worries about getting up to freeway speeds or making a decisive and safe overtaking maneuver. Yet fuel economy still averages out at about 37 mpg.

The Sorento Hybrid accomplishes this in a polished manner. Transitions from gasoline to electric propulsion are virtually imperceptible.

Refinement isn’t only reserved for the drivetrain. The suspension soaks up bumps without being too soft, and the steering has just the right amount of weight to it. Where it’s fitted, the all-wheel-drive system has a mode for snow.

Interior comfort

A pleasant dashboard design — that looks like it could easily have graced a luxury car a few years ago — brings a classy air to the 2022 Sorento Hybrid’s cabin. Adding to this upscale vibe is the leather-wrapped steering wheel and the generously sized 10.25-inch infotainment touchscreen.

The Sorento Hybrid is a 6-seater, two in each row. Standard-issue captain’s chairs bring optimum comfort for those in the middle row. The Sorento’s wheelbase is about 3 inches shorter than the Telluride’s, so third-row legroom here makes it a kids-only zone.

The second row, however, has an expansive 40.7 inches of legroom. And the seats are still foldable, for those occasions when there’s some serious hauling to be done.

Behind the third row is 12.6 cubic feet of luggage space, expanding to 38.5 and then 75.5 cubic feet as the back rows tumble. These figures are the same as the non-hybrid Sorento, meaning no compromises in packaging with the extra hybrid hardware.

Also on MarketWatch: These 5 great, easy-to-read books about money will change how you think about investing

Exterior styling

A year into this fourth generation of Sorento, the exterior design remains fresh. It’s a confident and mature look, reflecting the great strides the Kia marque as a whole has taken in recent years.

The most affordable trim comes with 17-inch alloy wheels, roof rails with a satin chrome finish, plus wheel arches and side cladding in matte black. The higher trim brings LED fog lights, along with a radiator surround and rear spoiler in gloss black.

Premium paint choices for either version are Runway Red or Snow White Pearl.

Favorite features

Second-row captains’ chairs
Often an optional extra in other 3-row crossovers, these separate seats are more comfortable than the usual 3-person bench while providing easier access to the third-row seats.

6-speed automatic transmission
The difference between this and a continuously variable transmission (CVT) may be lost on some. But respect to Kia for installing it. A typical CVT, often found in hybrids and other vehicles, is a cheaper form of automatic transmission. As a result, it can be slow and noisy. This 6-speed unit improves the quality of driving life.

Standard features

In the grand scheme of Sorento things, S trim would be one up from a base LX. But that applies only to the non-hybrid version. The 2022 Sorento Hybrid starts with a well-equipped S model.

This includes heated side mirrors, keyless entry/start, leather-wrapped steering wheel, simulated leather upholstery, 10-way power-adjustable driver’s seat, heated front seats, dual-zone automatic climate control, and second-row captain’s chairs.

See: The features buyers want most and least in a new car

Among the driver assistance features are forward collision warning with pedestrian detection, blind-spot monitoring with rear cross-traffic alert, lane-keeping assistance, lane-departure warning, rear parking sensors, automatic high beams, and rear occupant alert (warning the driver if someone or something has been left on the back seat at the end of a trip. It happens).

The standard infotainment system comes with the largest touchscreen available in the 2022 Sorento range, a 10.25-inch unit. Apple
AAPL,
-0.30%
CarPlay/Android Auto smartphone integration is also on board, along with navigation, satellite radio, voice recognition, Amazon
AMZN,
-1.13%
Alexa compatibility, Bluetooth, and no less than eight USB ports.

Factory options

Actual options are relatively few. There’s all-wheel drive, powered panoramic sunroof package with LED interior lighting (for the EX only, costing $1,300), premium paint ($445), cross bars for the roof rack ($360), side steps ($690), rear-seat entertainment system ($1,500), self-dimming rearview mirror with garage door opener ($350), and some other minor things. To obtain more features, think about the top EX trim.

This model adds LED fog lights, wireless phone charging, hands-free liftgate operation (with height adjustment), a more sophisticated forward collision mitigation system with cyclist detection and junction assistance, Highway Driving Assist/navigation-based smart cruise control (see our Safety Technology section below), and front parking sensors. When all-wheel drive is included with the EX, this brings 19-inch alloy wheels.

Also see: The 2022 Kia Seltos is stylish, practical and affordable

Engine and transmission

A turbocharged 1.6-liter 4-cylinder engine functions as the gasoline side of this gas/electric hybrid drivetrain. It’s joined by an electric motor powered by a lithium-ion polymer battery.

Together, they create 227 horsepower and 258 lb-ft of torque, which goes through a 6-speed automatic transmission to either the front wheels in standard form (FWD) or an optional all-wheel-drive (AWD) system.

Maximum towing capacity is 2,000 pounds.

1.6-liter turbocharged inline-4
Permanent magnet synchronous electric motor
227 horsepower (total system output)
258 lb-ft of torque (total system output)
EPA city/highway fuel economy: 39/35 mpg (FWD), 36/33 mpg (AWD)

This story originally ran on KBB.com.