The beginning of 2026 is marked by a call for caution in financial markets. This is according to Christine Benz, director of Personal Finance and Retirement Planning at Morningstar, in her most recent analysis of the capital market assumptions of the main global investment firms.
He mentions that after a year of solid gains in equities, most managers reduced their return expectations for stocks over the 10-year horizon.
The adjustment is more visible in international markets. Although non-U.S. stocks still project higher returns than U.S. stocks, their expected returns are lower than before the 2025 rally.
This panorama leaves one conclusion for the investment strategy in 2026: the difference between the expected returns of stocks and bonds has narrowed significantly.
“Fixed income is once again strategic: it offers returns close to equities with much lower volatility, which reconfigures the portfolio for conservative investors.”
International managers
In his annual compilation, Benz explains that return forecasts are essential for planning. They allow you to calculate how much to save, estimate withdrawal rates and project retirement scenarios; However, it emphasizes that these assumptions are designed for horizons of seven to ten years, so they are more useful for investors with that period or for those who are close to retirement.
Vanguard is one of the firms that reflects this change of vision. The manager projects that US stocks will generate nominal returns of between 3.5 and 5.5% annually in the next decade, while fixed income would reach between 3.8 and 4.8 percent. That is, in its base case, bonds would slightly outperform stocks.
BlackRock maintains a similar position. It estimates returns of 5.2% for US stocks and 4.1% for aggregate bonds. Fidelity, with a 20-year projection, forecasts returns of 5.8% for US stocks and 5.1% for bonds.
JP Morgan is more optimistic on the stock front. It projects nominal yields of 6.7% for large-cap US stocks and 4.8% for bonds. Schwab anticipates returns close to 5.9% for stocks and 4.8% for fixed income.
In contrast, Research Affiliates takes a more cautious stance. He expects just 3.1% annually for US stocks over the next decade and 4.7% for bonds. In addition, it assigns greater relative attractiveness to international stocks.
The most conservative scenario is Grantham Mayo Van Otterloo (GMO). The firm projects negative real returns of 6% for large-cap US stocks over seven years, while for bonds it forecasts only 1.3% real returns.
