Economist Forecasts Decade Of Modest Returns

Cronje says risks that could throw off that forecast include a decline in U.S. labor force participation and productivity; a dollar currency crisis; the return of trade barriers and punitive tax policies; and a major terrorist action.

“The low risk premiums in today’s markets imply that many things are expected to go well, when they may not,” Cronje says. “Diversification and a long-term view will be investors’ best allies, as they always have been.”

Investors can use bonds and other fixed-income holdings to guard against unexpectedly low economic growth, and they can use inflation-linked bonds, real estate and commodities to guard against inflation, Cronje says.