“High real rates is good news for all long-term investors because near-zero rates have depressed expected returns in the efficient frontier across all asset classes,” Davis said. “But there is a catch: we’d be in for some rocky weather as we adjust to that period during the next two or three years, and I think there’s more risk in the equity market than the bond market.”
Davis’ presentation offered a thought-provoking look into one company’s view—in this case, Vanguard—on the potential outlook caused by the dizzying and, for some people, unsettling technological changes occurring in the workplace.
“The defining trend of our lifetime isn’t so much demographics or globalization, although those forces will continue, but it’s the changing nature of work,” he said. “I believe the future will present new paradoxes and more challenges, but it’s an exciting one because it’ll provide more opportunity.”
Let’s hope he’s right.