Today, we see two major macro trends shaping the investment landscape: the rise of economic nationalism, which increases inflation volatility and encourages domestic investment, and the transformative adoption of artificial intelligence (AI), expected to boost corporate profits and productivity by around 20 basis points annually.

Economic nationalism, driven by supply chain vulnerabilities and the desire for resilience, is expected to persist, influencing trade policies and increasing inflation volatility, while AI adoption is a key driver of productivity and profit growth for tech giants like NVIDIA, Microsoft, and Alphabet.

These trends underscore the importance of diversification through global equities and alternative assets such as real estate, private equity, infrastructure, commodities, and gold, to manage risks associated with rising volatility and inflation.

Long-term return assumptions for various asset classes, including fixed income, equities, and alternatives, reflect expectations of moderate growth and rising geopolitical and technological influences over the next decade.

J.P. Morgan Asset Management's 2026 Long-Term Capital Market Assumptions, now in its 30th year, provide a comprehensive outlook on returns and risks across over 200 assets and 20 currencies, highlighting a shift towards a healthier, normalized global economy after years of ultra-low interest rates.

The report emphasizes that diversification into alternative assets like private equity, real estate, infrastructure, and commodities is crucial for building resilient portfolios, especially amid economic nationalism and market volatility.

Despite recent equity gains, long-term projections remain robust, supported by AI-driven productivity, technological investments, and demographic shifts, though growth in developed markets is expected to moderate.

Potential winners include technology giants such as NVIDIA, Google, Microsoft, and Amazon, along with alternative asset managers like Blackstone, KKR, and Apollo, while sectors dependent on global supply chains and traditional asset managers may face challenges.

The overarching strategy remains anchored in the continued relevance of the 60/40 portfolio, which can be enhanced by diversification and active management to navigate higher volatility and geopolitical risks.

Insights from over 100 experts suggest that active management and a focus on alternatives are vital for adapting to the evolving economic landscape driven by policy, technology, and demographic changes.

Forecasts indicate a 6.4% annual return for a traditional 60/40 stock-bond portfolio over the next 10-15 years, with a potential increase to 6.9% when including a 30% allocation to diversified alternatives, improving risk-adjusted performance.

The broader implications point to a departure from the 'lower for longer' interest rate environment, with increased geopolitical and trade risks, and AI's potential to fundamentally reshape productivity and corporate profitability, influencing future investment strategies.