2035: An Allocator Looks Back Over the Last 10 Years

Over the past decade to 2035, investors were reminded that starting valuations matter, with richly priced U.S. equities and expensive private markets delivering disappointing results versus cheaper international stocks and more mundane bonds. The hard lesson was that illiquidity and infrequent pricing did not turn private equity or private credit into safe harbors; they remained high-risk equity and credit exposures, but with higher fees and ultimately lower net returns. Many allocators also discovered the cost of chasing narratives in crypto at peak enthusiasm, as well as rotating away from unfashionable but resilient strategies like value investing, trend following, risk parity, and global diversification just before they paid off.

At the same time, traditional active management again showed how difficult it is to beat low-cost indices after fees unless one is very deliberate about factor exposures and manager selection. For advisors and investors today, the opportunity lies in re-embracing valuation discipline, broad global diversification across public markets, thoughtful use of systematic diversifiers such as trend following, and a more skeptical approach to complex products that promise smoother rides without clear evidence of excess net return.

The key risk going forward is repeating the cycle: extrapolating recent winners—whether regions, asset classes or styles—while abandoning unloved assets precisely when their prospective returns improve.