Overview

• J.P. Morgan Asset Management visuals cited in the report link high starting valuations to muted long‑term equity returns of roughly 1–2% or less on a statistical basis.
• Investor risk is magnified by concentration in U.S. equities, with the country comprising over 70% of popular global benchmarks such as the MSCI World.
• Other gauges, including price‑to‑book, are elevated, and the richest valuations are concentrated in large U.S. technology names rather than across all sectors.
• The suggested response is broader diversification rather than selling core global holdings, with added exposure to small caps, Europe and emerging markets, while noting small caps’ higher drawdown sensitivity.
• Countervailing forces could change outcomes, including potential AI‑driven growth, persistent inflation that may buoy assets, and currency effects such as a weaker dollar reducing U.S. gains for euro investors.