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Investing Amid Low Expected Returns

Making the Most When Markets Offer the Least

Antti Ilmanen

Wiley, 2022

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Since the 2008 global financial crisis, investors have had many reasons to feel good. Low interest rates pushed stocks to record levels, leaving investors to reap what financial expert Antti Ilmanen considers “excess gains.” But the good times are coming to an end, Ilmanen warns in this useful study. In a world of higher interest rates, it’s unlikely that investors will continue to enjoy stellar returns. That means they need to start paying close attention to details like diversification and risk management. Ilmanen isn’t predicting a market collapse, but he does want investors to prepare for a challenging future.

Take-Aways

Investors need to adapt to a new reality.
Low returns pose serious challenges for those saving for retirement.
Past performance of equities provides no guarantee of future results.

About the Author

Antti Ilmanen is principal and global co-head of the Portfolio Solutions Group at AQR Capital Management. He is the author of Expected Returns and holds a PhD in finance from the University of Chicago.

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