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pair of Wall Street giants, Goldman Sachs and JPMorgan Asset Management, are tempering their optimism about stocks and bonds. While the US economy appears strong, they believe returns may have been pulled forward. However, real estate, particularly commercial properties, could be poised for a rebound.

    Goldman Sachs recently forecast that US equities will rise only 3% annually over the next decade, down from an average of 13% in the previous 10 years. The firm cites high valuations, a concentrated market, increased recession risk, lower profits, and elevated interest rates as factors contributing to this outlook.

    JPMorgan Asset Management shares some of these concerns but is not as pessimistic. They expect US large-cap stocks to appreciate by 6.7% annually over the next decade, down from 7.9% two years ago. JPMAM strategists worry that future gains have been pulled forward due to the S&P 500's strong performance.

    Despite this more cautious outlook, JPMAM remains optimistic about the US economy, forecasting 2% real GDP growth and 2.4% inflation in the long term. They believe the foundations for economic growth are stronger than they were a year ago, with some of their concerns about inflation alleviated.

    As stock returns are expected to decline, JPMAM suggests that real estate could be an attractive investment opportunity. The firm projects US core real estate yields will rise to 6%, up from just over 4% a few years ago. Commercial properties, in particular, may offer a compelling value proposition due to their relatively low prices and potential for future growth.

    Investors can consider working with JPMAM's team or exploring publicly traded real estate investment trusts (REITs) to bet on a commercial real estate rebound. Potential areas of interest include multifamily housing, student housing, cell towers, and data centers – modernizing assets that could attract investors in the future.