Traditional stock-bond portfolio returns will fall to 100-year low: MS - Business Insider

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Morgan Stanley warns that returns for traditional portfolios will slide near 100-year lows over the next decade

The bank is warning investors that the annual return on a traditional portfolio made up of 60% stocks and 40% bonds could fall to 2.8% over the decade, a near-century low and roughly half of the average over the last 20 years.

Here's a graph depicting the historical returns of a traditional 60/40 portfolio and its predicted decline, according to Morgan Stanley. "The return outlook over the next decade is sobering – investors face a lower and flatter frontier compared to prior decades," the firm wrote in a note to clients Sunday. "Investors will need to accept much higher volatility to eke out small incremental units of return.

 

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