Gregory Davis, President and Chief Investment Officer at Vanguard, has advised investors to reconsider their heavy allocations to U.S. equities. He projects that U.S. stocks will yield lower returns over the next decade due to elevated valuations and suggests a rebalancing toward bonds and international equities. Davis recommends a portfolio allocation of 60% fixed income, 20% international equities, and 20% U.S. stocks. This approach aims to mitigate risks and enhance long-term stability.
Davis’s outlook contrasts with prevailing market optimism, which is buoyed by expectations of continued economic growth and technological advancements. His perspective underscores the importance of diversification and a cautious approach to U.S. equity investments.
Investors considering this strategy may explore diversifying into international markets and fixed-income securities to align with Davis’s recommendations and potentially improve portfolio resilience over the long term.
