Prescriptions for late-cycle portfolio construction

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Time-tested projections to build stronger portfolios

Our 2019 Long-Term Capital Market Assumptions (LTCMAs) offer a message of secular optimism, broadly consistent with our 2018 assumptions. This optimism is tempered by the reality of latecycle headwinds and an uptick in volatility, as many economies are operating above trend with little slack and asset valuations remain elevated (although after December’s sell off, stocks now look cheap relative to their own history, as well as to bonds). These views are incorporated into our 10- to 15-year forward-looking risk and return estimates across asset classes. But how can institutional investors protect their portfolios from near-term stresses so that they can be positioned for long-term success?