It’s your turn now long-term investors: JPMAM

Yasmine Raso

Senior Journalist, Financial Newswire

1 December 2022

J.P. Morgan Asset Management’s (JPMAM’s) latest Long-Term Capital Market Assumptions (LTCMAs) for 2023 see more attractive opportunities on the horizon for long-term investors after a year of lower valuations and higher yields.

In its 27^th edition, the report forecasted the annual return for a USD 60/40 stock-bond portfolio in the next 10 to 15 years to jump from 4.30 per cent last year to 7.20 per cent due to the influence of broader macroeconomic trends.

Developed using JPMAM’s analysis process with insights from a team of over 90 experts, the LTCMAs highlighted how long-term return forecasts have risen in line with expectations of inflation to slow down in the next few years.

“The latest LTCMAs forecast shows that the core principles of investing still hold firm after a year of turmoil – 60/40 can form the bedrock of portfolios, while alternatives can offer opportunities for alpha, inflation protection and diversification,” Leon Goldfeld, Asia Pacific Head of Multi-Asset Solutions at J.P. Morgan Asset Management, said.

“The painful slump in stock and bond markets in 2022 may not yet be over, but over the longer term we see this year’s turmoil creating the most attractive investment opportunities we’ve seen in a decade.”

The report signalled the chance for investors to enter the market at an attractive point and position themselves for the long-term after a “painful” ride throughout the year, with a much more positive returns outlook for the future.

“Despite the disruptions brought by the pandemic, supply chain disarray and geopolitical tensions, we believe globalization will evolve but not unravel,” Tai Hui, APAC Chief Market Strategist at J.P. Morgan Asset Management, said.

“Winners and losers will emerge across regions and industries as a fragmented global economy will reach a new trade equilibrium in the long term, one that allows for some restored efficiencies and inflation falling back to central bank targets.”