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

Meanwhile, the absence of a recession should also bolster equity markets over the coming 12 months. Indeed, we’re at a rare moment when in our base case we expect cash, bonds, stocks, and alternatives to all deliver reasonable returns. This strengthens the case for investors adding to diversified portfolios.


The chance of a soft landing has been rising.

  • We acknowledge continued bouts of geopolitical stress and concerns over the US budget process; the US economy continues to look closer to being in balance.
  • Receding inflation bolsters hopes of an end to rate hikes in the near future.
  • A US recession looks unlikely, as the labor market remains 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 since end-July.
  • 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, 5% 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 13% in our base case, 1% in our upside economic scenario, and 19% 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 potentially enhance investors’ ability to systematically rebalance, diversify, reinvest, and access attractive underlying investments.


Main contributors - Jon Gordon, Vincent Heaney, Matthew Carter, Julian Wee, Christopher Swann


Original report - Why invest in a balanced portfolio now?, 23 October 2023.