Richard Turnill, BlackRock’s chief global investment strategist, advises investors to “curb their enthusiasm.”  Turnhill commented in BlackRock’s most recent weekly market commentary: “We see a global portfolio made up of 60% equities and 40% fixed income producing annual returns of just 3.3% in U.S. dollars before inflation over the next five years.” Turnhill speaks well of foreign stocks, emerging market stocks, and private equity, saying “our international equity return estimates are now above the long-term average, thanks to improved valuations outside of the U.S.” GMO presents a similar picture, warning “you’re going to be disappointed in the next seven years.” The Boston-based firm projects large-cap US stocks producing a negative 2.3% annualized return and large cap international stocks generating a 1.2% return. It predicts the best stock bet is emerging market stocks, where GMO estimates at a 4% per year after inflation return, and the best investment is timber with an expected 4.8% annual return. The lower than expected return estimates are being driven largely by earnings and the overall market valuation. “The S&P 500’s price-to-earnings ratio is 17.8, using forward earnings estimates — above its 15-year average”, writes John Waggoner.