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What JPMorgan Sees Coming: 30 Years of Market Wisdom
Tom Dickson hosted a Financial Experts Network webinar with Phil Camperoale (Portfolio Manager, J.P. Morgan Asset Management) and Taylor Nolan (Relationship Manager). Phil walked through J.P. Morgan’s 30th annual Long-Term Capital Market Assumptions (LTCMAs)—a 10–15 year framework forecasting returns, volatility, and correlations to support strategic asset allocation, model portfolio construction, and goals-based planning.
1) What the LTCMAs are—and how JP Morgan says advisors should use them
Phil emphasized the assumptions are designed to reduce short-term “headline noise” and instead guide durable portfolio positioning over the next decade-plus by forecasting:
- Expected return
- Expected volatility
- How asset classes behave together (correlations)—especially important after recent periods when stocks and core bonds moved together more than expected.
He framed three primary uses:
- Asset allocation / portfolio management (including scaling RIAs through model portfolios)
- Practitioner implementation (building resilient portfolios through cycles)
- Goals-based planning using confidence intervals (what could happen, not just the midpoint forecast).
2) The headline numbers discussed on the webinar (and how they’re framed)
60/40 expectations and uncertainty
Phil stated a 60/40 portfolio is expected to deliver ~6.4% annually, with a confidence interval of roughly 2.9% to 10.8% (illustrating why ranges matter in planning, not just point estimates).
Cash vs. diversified portfolios
He argued a major risk right now is staying in cash, citing very large money market balances and emphasizing that portfolio decisions shouldn’t be “cash vs. equities,” but rather “cash vs. a thoughtfully diversified portfolio.”
External fact check: ICI’s weekly Money Market Fund Assets release shows money market assets in the $7+ trillion range in early December 2025.
3) Alternatives and the AID framework (Alpha, Income, Diversification)
Phil described alternatives using AID:
- Alpha (example: private equity)
- Income (example mix: real estate, private credit, infrastructure)
- Diversification (example: diversified hedge funds, commodities)
During Q&A, he gave a specific illustrative breakdown of the alternatives bucket:
- 25% Alpha (private equity)
- 50% Income (real estate + private credit + infrastructure)
- 25% Diversifiers (hedge funds + commodities)
He also stressed manager selection risk is far larger in private markets than public markets (wide dispersion between top and bottom quartile managers).
External fact check (JP source): the official LTCMA publication discusses public and private market assumptions and highlights dispersion/selection considerations.
- https://bcapital.partners/wp-content/uploads/2025/10/JP-Morgan-2026-Long-Term-Capital-Market-Assumptions.pdfB Capital
4) Macro drivers highlighted: growth, inflation, productivity, and “economic nationalism”
Phil explained JP’s building-block approach: nominal GDP (labor + capital + productivity + inflation) flows through to revenue growth, with margins, valuations, and dividends determining equity total return; while fixed income return is driven heavily by starting yields, curve/roll-down, and default losses in credit.
He repeatedly highlighted:
- Productivity growth as a key “wild card,” especially with AI’s potential impact
- Economic nationalism and shifting labor dynamics as meaningful long-run forces
- A view that margins and valuations may not mean revert as strongly as traditional models assume (i.e., the “moat” argument for leading firms).
- https://bcapital.partners/wp-content/uploads/2025/10/JP-Morgan-2026-Long-Term-Capital-Market-Assumptions.pdfB Capital
External fact check (JP source): the 30th-edition LTCMA explicitly references “economic nationalism,” fiscal activism, and technology adoption as core themes.
5) Rates and credit: “fixed income is back” logic
Phil pointed to higher starting yields as improving long-run fixed income return expectations (and said the 2022 bond drawdown effectively “front-loaded” the normalization pain).
External fact check (JP source, public market assumptions table): the LTCMA includes long-run estimates such as 10-year U.S. government bonds ~4.6% and U.S. high yield ~6.1% (long-run, USD).
- https://bcapital.partners/wp-content/uploads/2025/10/JP-Morgan-2026-Long-Term-Capital-Market-Assumptions.pdfB Capital
6) Q&A additions from the transcript (important “extra” items)
Geopolitics and diversification
Asked about escalation risks (e.g., Russia), Phil’s core answer was that the LTCMAs assume black swan events occur over 10–15 years and that the response is portfolio resilience via diversification, even if tactical price moves can be sharp.
Labor market / youth unemployment clarification
Tom cited a data point for recent college grads ages 20–24 around ~9.5% unemployment as of September 2025, correcting his earlier recollection.
External fact check (primary source series):
Fed “cut yesterday”
Phil referenced the Fed cutting rates “yesterday” during the webinar.
External fact check (rate decision reporting): the Fed’s December 2025 cut is widely reported as taking the target range to 3.50%–3.75%.
- https://www.wsj.com/buyside/personal-finance/mortgage/fed-rate-decision-december-2025-savings-cds-mortgagesWall Street Journal
- https://www.reuters.com/markets/us/feds-schmid-says-dissented-because-inflation-is-too-hot-policy-should-be-2025-12-12/Reuters
7) Action items (from your Otter list, kept intact)
- Create/update a slide showing % breakouts for alternatives (AID: allocations to alpha, income, diversification) and include it in presentation materials.
- Follow up with contacts who opt in to learn more about JP Morgan’s investment product lineup using the passed contact information.
- Discuss offline with Tom Dickson options to distribute JP Morgan guides to the Financial Experts Network community.
- Respond to attendee emails requesting the webinar slides and send slides via email to anyone unable to download them.
- Collect and pass opt-in names/emails from the market-commentary poll to JP Morgan’s team (for distribution list).
- Collect and pass opt-in contact information from the investment-product-interest poll to Taylor Nolan’s team for follow-up.
- Unmute webinar participants on request so they can pose their questions directly to Phil.
Combined source list (written-out URLs)
Transcript / Otter summary link (provided):
JP Morgan long-term assumptions (official landing page):
- https://am.jpmorgan.com/us/en/asset-management/institutional/insights/portfolio-insights/ltcma/JPMorgan
JP Morgan LTCMA “30th edition” PDF (publicly accessible copy):
- https://bcapital.partners/wp-content/uploads/2025/10/JP-Morgan-2026-Long-Term-Capital-Market-Assumptions.pdfB Capital
Money market assets (primary industry data):
Fed decision context (external reporting):
- https://www.wsj.com/buyside/personal-finance/mortgage/fed-rate-decision-december-2025-savings-cds-mortgagesWall Street Journal
- https://www.reuters.com/markets/us/feds-schmid-says-dissented-because-inflation-is-too-hot-policy-should-be-modestly-restrictive-2025-12-12/ Reuters
Recent college graduate unemployment series (primary dataset):
Many new ideas. For me, a new way to analyze capital markets.
- Mark Z.
The speaker was awesome. I liked how he described Alternatives as giving "AID" to a portfolio's return.
- Anne D.
I liked the 60/40 actual compared to estimated slide. Nice presentation. I already do this quarterly with my assigned relationship manager from JPM, but it was nice seeing different materials.
- Mark M.
Attendees Comments:
Many new ideas. For me, a new way to analyze capital markets.
- Mark Z.
The speaker was awesome. I liked how he described Alternatives as giving "AID" to a portfolio's return.
- Anne D.
I liked the 60/40 actual compared to estimated slide. Nice presentation. I already do this quarterly with my assigned relationship manager from JPM, but it was nice seeing different materials.
- Mark M.