With our country’s semi quincentennial less than a year out – the United States will celebrate its 250th anniversary July 4, 2026 – it seems apt that we explore what it is to become a mature economy.

Were the next 50 years to resemble those of other modern developed nations with slowing growth and aging populations – namely Europe and Japan – what would we want to buy today and hold in 2056 as the U.S. celebrates its 300th anniversary?

Based on an analysis of the last fifty years of asset class returns across Europe and Japan – the short answer is domestic equities, prime residential property, sovereign bonds, and gold.

Public equities have outpaced inflation and outperformed fixed income over long periods across the globe. Accordingly, U.S. investors may be wise to make core allocations to a diversified basket of domestic equities on a total return basis (dividend reinvestment and price appreciation). Given the long-term success of equities across domiciles, a complementary allocation to a global ex-U.S. basket of developed and emerging market equities might offer diversification of growth assets.

Real estate in prime cities like Paris, London, Amsterdam, Zurich and Tokyo has produced equity-like results with lower volatility. Similarly, investments in top-tier U.S. markets – particularly those that do not face substantial climate-risk – are likely to hold value and generate consistent rental income. Real estate investment trusts (REITs) also offer diversified low-cost exposure to multiple markets and asset types (residential, commercial, warehouse).

Bonds and notes are an important source of liquidity. In addition to sovereign issues, U.S. investors should consider holding tax-advantaged municipal bonds with an emphasis on quality. Additionally, TIPS (Treasury Inflation-Protected Securities) issued by the U.S. Treasury would provide portfolio protection in periods of elevated inflation.
While gold is not a productive asset, it has served as a portfolio ballast in periods of extreme uncertainty. Investors may consider small allocations to gold, other precious metals, and similar assets to serve as a crisis hedge.

Private equity has generated strong performance for European (buy-out) and Japanese (pan Asia) investors willing to trade liquidity for differentiated sources of growth over the last 50 years. Results have been similar within the U.S. though in all markets, though performance dispersion within the asset class is high based on implementation and access. Accordingly, we’d approach the asset class with interest tempered by caution.

The U.S. experiment has overcome existential crisis previously whether our civil war or the extraordinary social and political conflict of the 1960s. It would be premature to count our country out, but should we be entering our golden years, you know what’s on our short list of investments.

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