Cautiously Pessimistic
- There are several valid reasons investors are pessimistic.
- All outlooks should be cautious, because they could be wrong.
- Investors should prepare for lower returns and more volatility, but they should also expect opportunities to enhance returns and manage risk.
- Investors should consider aggressively diversifying, including through liquid alternatives and real assets.
- Active management may also make sense given the vulnerability of large-cap indices.
- Investors nearing retirement or in retirement should consider tactical allocations.
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