Core Viewpoint - Global major economies are developing along different trajectories, with government bond returns sufficient to crowd out many other investments, but not all liquid assets are the same. Stocks remain the core of long-term returns, while illiquid alternative investments, especially hedge funds, tend to thrive in such environments [1][4][5]. Economic Forecasts - The long-term macroeconomic forecasts for key variables from 2025 to 2034 indicate that the US is expected to have a real GDP growth of 2.5% over ten years, while the Eurozone is projected at 1.2%. Inflation rates are expected to be around 2.5% for the US and 2.0% for the Eurozone over the same period [2][5]. - China’s long-term growth is anticipated to weaken to approximately 3.7%, while India is expected to maintain growth above 5% despite a slowdown [5]. Bond Market Insights - The expected returns for Eurozone government bonds and investment-grade bonds are around 5.0%, while US and UK bonds are projected to yield between 4.5% and 5.2%. High-yield bond returns are expected to be only 1% to 1.5% higher than these figures [1][8]. - Credit spreads are currently at historical lows, increasing the likelihood of spread widening in higher-risk fixed income sectors [8]. Stock Market Analysis - Stocks are largely dependent on corporate earnings growth for returns, with expected returns in developed markets projected to be between 6% and 8% over the long term. This is considered average or below average, particularly in Europe [9][14]. - Despite short-term volatility, stocks are expected to provide higher returns than cash for patient investors [9]. Alternative Investments - Liquid alternative investments are expected to yield a return of 3.9% over the next decade, driven by higher returns from cash and stock alternative strategies, but may not perform as well as government bonds [10]. - Non-liquid alternative investments, particularly in private equity and hedge funds, are projected to perform relatively well, with average returns around 6.5% [11]. Market Dynamics - The long-term outlook suggests that the growth paths of developed markets are unlikely to converge, with significant differences in actual growth and short-term interest rates expected to characterize the next decade [5][6].