Investors should review portfolios to ensure an effective balance across asset classes to manage potential risks and ensure that returns are durable. (UBS)

In our view, this creates an opportune moment for investors. We expect decent returns across asset classes, adding to the potential upside for diversified multi-asset portfolios.


The chance of a soft landing has been rising.


  • A few months ago, inflation was well above target, the labor market was extraordinarily tight, and the financial system was straining under the pressure of higher interest rates.
  • Today, the economy looks closer to being in balance. Receding inflation has raised hopes of an imminent end to rate hikes.
  • A US recession is looking unlikely. The labor market has remained resilient and earnings have improved.

Against this backdrop, we expect decent returns across asset classes.


  • Despite the improvement in the economic outlook, global bonds and equities both lost ground in the third quarter, creating an opportunity for investors.
  • We’re at a rare moment when in our base case we expect cash, bonds, stocks, and alternatives to all deliver reasonable returns.
  • That’s both over the next six to 12 months and over the longer term.

We think it's time to add exposure to diversified portfolios.


  • Adding to diversified multi-asset portfolios usually makes sense as the core of a wealth strategy.
  • The positive outlook for all major asset classes, however, makes the timing particularly opportune.
  • Part of “getting in balance” means not overallocating to cash, so it’s important to manage liquidity.

Did you know ?


  • Our base case is for the yield on 10-year US Treasuries to stand at 3.5% in 12 months, 4% in our upside scenario for growth, and 2.75% in our downside scenario of a recession. That would translate into total returns over the period of 14% in our base case, 10% in our upside economic scenario, and 20% in our downside scenario.
  • The longer-term outlook is even more positive for balanced portfolios versus cash, in our view. We expect cumulative cash returns of just 5–14% over the next five years, versus cumulative returns of 15–25%in bonds, 40–55% in stocks, and 25–65%in alternatives, based on our Capital Market Assumptions.

Investment view


Investors should review portfolios to ensure an effective balance across asset classes to manage potential risks and ensure that returns are durable. Professionally managed solutions can enhance investors’ ability to systematically rebalance, diversify, reinvest, and access attractive underlying investments.


Main contributors: Jon Gordon, Vincent Heaney, Matthew Carter


Read the original reportWhy invest in a balanced portfolio now?, 10 October 2023.