Expected returns are pretty low for most asset classes with the exception of Emerging market equities and European private equity. The low expected returns are a symptom of high current valuations.
In our opinion, the US stock market is highly valued and priced for below average returns over the next 10-20 years; therefore, buying and holding the S&P 500 is not advised.
The US economic environment remains in a slowdown, having peaked in late 2018.
Market sentiment remains mixed as international stocks, domestic stocks, and high yield bonds are underperforming defensive assets over at least two out of three time periods. However, these assets are breaking out to new highs and are all positive over short, intermediate, and long-term time frames.
The Federal Reserve is easing policy and seems determined to keep market sentiment elevated. They have slashed interest rates and are supporting the market with additional balance sheet expansion and overnight operations.
Click below for the full report and webinar playback.