While Consumer Confidence data for March came in lower than expected, markets showed little to no reaction. Morningstar Portfolio Strategist Amy Arnott joins Yahoo Finance Live to discuss why this underscores the importance of diversified portfolios. Arnott describes the lower-than-expected consumer confidence as "a little blip," emphasizing that the economy remains strong despite these numbers. She advises investors to "focus on the long term," saying the main concern should be inflation, which she calls a "big question mark" as rate cut uncertainty heightens. She notes that if rate cuts don't materialize, they will "weigh down" the market, which is why she advises investors to focus on "portfolio diversification." Arnott explains that which asset class will outperform "in any given year" is unknown, making portfolio diversification crucial. For that reason, she recommends avoiding being "overexposed" in areas like technology and broadening out to sectors such as small-caps. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Angel Smith