Jon Baranko

A large institutional investor recently posed a simple question: Where should one invest today to achieve a 10% real return? Over the past three years, hitting that mark was easy. Major equity indexes all bested 10% real returns—even a conservative 40% equity/60% bond portfolio hit the target (Figure 1). But markets were unusually supportive, and the more relevant perspective is forward looking. Can investors expect this to be repeated, or should they take a more patient approach?