European Equities Expected to Outperform U.S. Stocks in the Next Decade, Says J.P. Morgan
Poised for Success
John Bilton, an expert from J.P. Morgan Asset Management, predicts that European stocks will outshine their U.S. counterparts over the next 10-15 years. This projection is based on several factors, including an overvalued dollar, more attractive initial valuations, and higher dividends from overseas investments.
U.S. Market Challenges
Despite a 277% lead over 14 years, the U.S. market stumbled last year due to rapid inflation and surging interest rates. In contrast, the Euro STOXX 50 experienced a 14% growth, surpassing the performance of both the S&P 500’s 10% and the Dow Jones Industrial Average’s 4.4%.
Diversifying Portfolios
Bilton suggests that dollar-based investors should consider diversifying their portfolios by including international stocks, which could potentially boost returns. He anticipates an average annual return of 8% for euro area equities over the next decade. Comparatively, equities in Japan and the U.K are expected to yield 7.6% and 6.9%, respectively.
Shifting Investment Strategies
While the U.S. remains a hub for technology stocks, J.P. Morgan’s report highlights that defensive stocks, such as consumer staples, healthcare, and utilities, offering steady dividends are more common outside the U.S. This trend may influence global investment strategies as investors seek to optimize returns while managing risks.
Investors should keep an eye on the European market as it presents promising opportunities for the future.
