The JPMorgan Guide to the Markets is a quarterly publication of roughly 60–90 slides, each pairing one chart with a short explanatory caption, that is updated four times a year. It is designed to give financial professionals a shared factual baseline — asset-class returns, valuations, earnings, and macro data — for client conversations rather than to recommend specific trades. It is free to download and widely used as an educational reference.
The guide matters because it compresses decades of market history into visual form, and the way each chart is constructed changes what it can and cannot tell you. Reading it well requires understanding the building blocks: what window a chart uses, whether returns are nominal or inflation-adjusted (real), annualized or cumulative, and whether a "current" reading is a starting condition or a forecast. This explainer walks through those mechanics, quantifies the context around the most-cited charts, flags edge cases and common misreadings, and gives concrete steps for using the guide without overreading it.
What the guide actually is
The publication is assembled by JPMorgan Asset Management's market strategy team and released near the start of each calendar quarter. Each slide follows a fixed template: a title, one chart, a caption of a few sentences, and a data source line. The slide deck is grouped into sections — market returns, the economy, interest rates, equities, fixed income, and international markets — so a reader can move from broad macro to specific asset classes.
The core design choice is one chart per page. That constraint forces editors to pick a single lens, which is why the same underlying data (say, S&P 500 valuations) can appear as a long-term average line on one slide and a current decile ranking on another. The chart is an argument made visually, not a neutral data dump. Knowing this keeps you from treating any single slide as complete.
The guide is an educational and marketing document, not research with buy or sell calls. JPMorgan distributes it without charge partly to support advisor-client conversations. That origin shapes its framing — it emphasizes long-run diversification and staying invested — so its selection of charts trends toward reinforcing that view. This is a professional caveat worth holding in mind: the guide is honest about inputs but not neutral about conclusions.
The mechanics behind a "long-run average" line
Most slides show a squiggly series against a flat average line. The flat line is not a law of nature; it is the mean of whatever window the editor chose. Change the start date and the line moves. Equity valuations plotted from the early 1990s look different from the same data since the 1970s, because the composition of the index changed (fewer banks, more technology) and interest-rate regimes differed. So the "average" is a property of the chosen start and end dates, not an intrinsic constant.
Returns compound, which is why the guide usually shows annualized figures when comparing long periods. A 10% average annual return over 20 years is not 10% total — it is roughly a 6.7-fold increase (1.10 raised to the 20th power ≈ 6.73). If a chart shows "average annual return since 1990" without saying "annualized," a single huge year can distort the headline. Mechanical compounding is why a few percentage points of annual difference, extended over decades, becomes a large gap.
Inflation adjustment is the other engine. Nominal returns overstate purchasing power gains when price levels rise. The guide sometimes shows real, inflation-adjusted returns; when it does, a historical nominal figure like 10% can shrink by roughly the inflation rate each year. A chart labeled "total return" typically includes reinvested dividends, while a "price return" chart does not — the two can differ by roughly 2% a year for US equities historically, which compounds enormously.
Plain version: the flat line and the "average" number are choices, and the choice of window and adjustment explains much of what you see.
Quantified context: what the recurring charts compare
The most-repeated comparisons are valuation, earnings growth, and return dispersion. Valuation slides typically show price-to-earnings (P/E) ratios against their own long-run history, often expressed as a percentile rank — a current P/E in the 80th percentile means it is higher than 80% of the readings in the chosen window. A percentile is not a forecast; it describes where today sits relative to the past, and high valuations have historically preceded both corrections and long continued gains.
Return-dispersion slides show that individual years vary wildly around the average. US large-cap stocks have produced single-year returns ranging from large losses to large gains within the same decade that the multi-decade average looks smooth. This gap between the calm average and the violent individual year is the whole point of showing both. The average describes a holding period; the year describes lived experience.
Asset-class comparison slides put stocks, bonds, cash, and sometimes real assets side by side over rolling periods. Rolling-window charts are especially useful because they kill the illusion of steady returns: they show what an investor would actually have earned over every 10-year window, revealing intervals where bonds beat stocks. When a slide shows "stocks outperform over the long run," the qualifier is that the long run can be 15–20 years and includes painful sub-periods.
A note on the diversification slides: correlations between asset classes are not constant. In crisis periods, many risk assets move together, so a portfolio that looked diversified in calm years can behave like a single bet in a downturn. Charts that average correlation over long windows can smooth over exactly the moments diversification is needed most — a genuine mechanical limitation, not a flaw anyone can eliminate.
The time course of a market cycle in the guide's framing
The guide often illustrates cycles as a sequence of phases. The table below is a generic synthesis of how such phases are typically presented; it is a teaching framework, not a dated prediction.
| Phase | Typical conditions shown | What the charts emphasize |
|---|---|---|
| Recovery | Earnings trough, sentiment weak | Valuations look high against depressed earnings |
| Early expansion | Earnings rising fast, rates low | Profit growth outruns valuation changes |
| Mid cycle | Growth steady, policy normalizing | Return dispersion widens across sectors |
| Late cycle | Margins peak, rates higher | Valuation percentiles stretch |
| Contraction | Earnings fall, volatility spikes | Correlation rises; diversification weakens |
Two thresholds get reconciled constantly in these charts and are easy to confuse: a valuation percentile (where price sits versus history) and a forecast of returns (what the next decade might deliver). These are different objects. A high percentile tells you the starting price is rich; it does not specify timing or magnitude of any future move. The guide's own long-run return projections, where shown, are scenario ranges built from starting valuations plus assumptions, not promises.
Edge cases and the counterintuitive detail
The counterintuitive professional caveat: a chart can be perfectly accurate and still mislead through the window it omits. Survivorship bias is the classic trap — index histories that include only companies still listed on the index overstate past returns, because failed firms dropped out. Modern index providers adjust for this, but older long-run series built from today's constituents can carry upward drift. When a slide shows a 100-year equity return line, ask whether the early decades reflect the companies that existed then or only those that survived to now.
A second edge case is currency. International return charts may be shown in local currency or in US dollars; the two can differ sharply in years of dollar strength or weakness. A foreign market that rose 15% in local terms could have returned far less to a US-dollar investor if the dollar appreciated. Slides usually label this, but the label is small, and the number's meaning changes entirely with it.
A third is index substitution. Long series often splice one index onto another when methodology changed, creating a small discontinuity at the splice point. The level shifts slightly; the shape looks continuous. You will not see this in the caption unless it is stated, so treat any very long line as a chain of series, not a single instrument.
Red-flag warnings to scan for: A caption that says "since 1990" or similar with no end-date adjustment, changing the average line. "Return" with no word total, price, nominal, or real — all four give different numbers. A percentile shown without its window; the percentile means nothing without the reference period. A rolling-window chart whose window length is buried in the caption. Correlation or diversification claims drawn from calm periods only. Projection or forecast ranges presented without the assumption list.
Common misconceptions, corrected
Misconception one: "the guide predicts the market." It does not. It assembles history and current conditions; most slides are descriptive. Where projections appear, they are model outputs with stated assumptions, and the guide is explicit that they are not guarantees.
Misconception two: "high valuation means imminent crash." Valuation is a starting condition, not a timing signal. Markets have run at elevated percentiles for years while continuing to rise. The mechanically correct statement is that high starting valuations have historically been associated with lower subsequent long-horizon returns on average — a statement about distributions, not dates.
Misconception three: "the average return is what I will earn." The mean hides the path. An investor who needs money in a specific year faces the actual single-year return, which can sit far from the average. Sequence-of-returns risk — the danger of a bad year early in a withdrawal period — is invisible on an average-line chart and is a real reason advisors pair the guide with horizon-specific planning.
Misconception four: "more charts means more certainty." Volume is not validity. Sixty slides of accurate history still cannot resolve an unknowable future. The guide's value is calibration and shared language, not resolution of uncertainty.
Practical actions for reading it well
Start with the caption, not the chart. The caption defines the window, adjustment, and units; the chart is the illustration. Before quoting any average, confirm four things: start date, end date, annualized versus cumulative, and nominal versus real. Convert any percentile into plain words: "higher than X% of readings since [date]" — and say the date out loud. Treat projections as scenario ranges; read the assumption list before repeating any number. When comparing asset classes, check the currency and the index-splice notes; these two labels change conclusions. Pair every average-return slide with a rolling-window slide when one is available, to see the path behind the mean.
For practical thresholds: if a valuation percentile exceeds roughly the 80th–90th of its own history, treat it as a rich starting point and lower your expected long-horizon return assumption rather than as a sell signal. If a rolling 10-year window shows an asset class losing to cash, note it as a lived-experience data point, not an anomaly to dismiss. Reconcile these two explicitly: rich valuation changes the expected distribution of future returns; a weak rolling window changes how a past investor actually fared. Neither one is a timing tool.
Limitations and what the guide cannot do
The guide is backward-looking by construction. Its charts describe what happened and where conditions stand; they do not know policy changes, geopolitical shocks, or technological disruptions in advance. Data revisions also matter: early estimates of economic series are later revised, so a chart captured in one quarter may show different history in the next edition. Always note the edition date.
Methodology choices — index family, currency, window, inflation treatment, splice points — are editorial decisions that shape the picture. The guide discloses sources and dates, but a reader must supply the skepticism about framing. Finally, no chart resolves the difference between a population average and an individual's outcome; personal horizon, tax situation, and cash needs sit outside the page.
This article is general educational information about how to read a widely distributed market publication. It is not a diagnosis, a treatment plan, a legal opinion, or an investment recommendation, and it does not promise any outcome or return. For decisions about your own portfolio, taxes, or finances, consult a qualified local professional who can account for your circumstances.