J.P. Morgan’s 2026 Long Term Capital Market Assumptions (LTCMAs) highlight a complex but opportunity-rich investment landscape, driven by three major forces: economic nationalism, fiscal activism, and a technology productivity boom (led by AI and digitalization).Despite geopolitical shifts and high government deficits, robust fiscal spending on infrastructure and innovation is driving substantial corporate profits. For investors, the outlook remains constructive. The traditional 60/40 portfolio offers solid potential, but the real opportunities lie in strategic diversification.

Equities remain a core strength, with U.S. profits resilient and emerging markets offering significant growth. Bonds are newly attractive due to higher starting yields and increased inflation volatility. Furthermore, alternatives such as private equity and hedge funds are poised to be major alpha contributors, while real assets benefit from fiscal investment.

The core message for long-term investors is the importance of diversifying across asset classes and geographies to capture higher international returns (partly driven by a weaker U.S. dollar) and manage increased market volatility. By staying diversified and adapting to these macro-forces, disciplined investors are positioned to capitalize on the transformation in 2026.

End Notes

Source: https://www.jpmorgan.com/insights/markets-and-economy/markets/2026-long-term-capital-market-assumptions