J.P. Morgan Asset Management’s Guide to the Markets lays out a data-heavy snapshot of global economic trends, asset class returns, and valuation dynamics to frame the current investing backdrop. It leans on history to show how returns are driven more by time and diversification than timing, while hinting that elevated valuations may compress future returns.
Guide to the Markets – US Q4 2019
J.P. Morgan Asset Management
Research
71 Pages
Key Takeaways
Valuation Return Tradeoff: Starting from higher valuations, forward P/E above 18x has historically led to 5-year returns closer to 4–6% versus 10%+ at lower entry points.
Diversification Still Works: A balanced 60/40 portfolio has delivered positive returns roughly 80% of rolling 5-year periods despite multiple drawdowns.
Earnings Drive Markets: About 70% of long-term equity returns come from earnings growth, with margins and revenue contributing over 90% of EPS expansion historically.
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