As global markets transition into a phase marked by slower growth, rising geopolitical tensions, and rapid technological transformation, investors are being urged to rethink traditional portfolio strategies. The convergence of fiscal activism, demographic shifts, and artificial intelligence is reshaping long-term investment dynamics, creating both challenges and opportunities.

Against this backdrop, J.P. Morgan Asset Management has released its 2026 Long-Term Capital Market Assumptions (LTCMAs), offering a 10–15-year outlook that remains optimistic despite recent volatility. The report forecasts a 6.4% annual return for the classic 60/40 stock-bond portfolio, and a higher 6.9% return for portfolios incorporating diversified alternatives. With AI expected to boost productivity and profits, and domestic investment rising in response to trade frictions, J.P. Morgan sees resilience and diversification as key to navigating the next decade.

Marking the 30th anniversary of its flagship report, J.P. Morgan projects a 6.4% annual return over the next 10–15 years for the traditional USD 60/40 stock-bond portfolio. However, the firm sees even greater potential for those willing to diversify further. A portfolio with 30% allocated to alternatives-such as private equity, real assets, and infrastructure-could yield 6.9% annually, with a 25% improvement in risk-adjusted returns.

Despite concerns over slowing growth due to labor market constraints, the report highlights AI adoption as a key driver of near-term profitability and long-term productivity.“Much of what worries investors today will ultimately pale beside the silver linings we see breaking through over the long run,” said John Bilton, Head of Global Multi-Asset Strategy.

Among the report's standout themes is the resilience of markets in the face of geopolitical and economic headwinds. Economic nationalism, while disruptive, is prompting increased domestic investment. Meanwhile, governments are fueling growth through record levels of stimulus and incentives, particularly in technology sectors.

Dr. David Kelly, Chief Global Strategist, emphasized that while developed markets may see moderated growth, robust investment and productivity gains-especially from AI-support a constructive long-term outlook.

The report also underscores the importance of diversification. With inflation volatility on the rise, J.P. Morgan advises investors to look beyond traditional assets.“Building resilience means going beyond the traditional,” said Grace Peters, Global Co-Head of Investment Strategy for J.P. Morgan Private Bank.“Alternatives and real assets are essential to manage risk and unlock new sources of return.”

Key Asset Class Forecasts:

Equities: U.S. large caps are expected to return 6.7%, while global equities could reach 7%. Emerging markets lead with a projected 7.8%.

Fixed Income: U.S. intermediate Treasuries are forecast at 4%, and high-yield credit at 6.1%.

Alternatives: Private equity tops the chart at 10.2%, followed by U.S. core real estate at 8.2%, and global infrastructure at 6.5%. Gold is expected to return 5.5%, up from last year's 4.5%.

The LTCMAs now cover over 200 assets across 20 currencies, evolving from a simple spreadsheet into a global benchmark for strategic asset allocation. As investors face a rapidly changing landscape, J.P. Morgan's latest assumptions aim to provide clarity and confidence for long-term planning.

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