Goldman Sachs just dropped a reality check: S&P 500 returns are gonna average only 6.5% annually over the next decade, down from the historical 10%. Not exactly panic-worthy, but here's the catch.

The culprit? AI valuations have gotten completely out of hand. A handful of mega-cap tech stocks have warped the entire market's P/E ratio to 23x—a multiyear high. When (not if) these premiums deflate, it'll drag everything else down with it—roughly 1% annual drag through 2035.

Interest rates are another headwind. Rising rates mean falling profit margins, unlike the past 30 years when both kept expanding.

But here's the play: **Look abroad.** Japan and Asia are priced for 8.2% and 10.3% growth respectively. Emerging markets? 10.9%. Foreign stocks like Alibaba and MercadoLibre (the Amazon of Latin America) offer higher growth runways, especially as the dollar's currently 15% overvalued—that's another 2 percentage points of tailwind for international plays.

Dividend stocks also deserve a second look. Pharma names like Merck and Pfizer are beaten down but have solid pipelines and payouts coming.

Bottom line: The low-return era for U.S. stocks is here. Time to diversify internationally and hunt for yield.