While it might be tempting, after two years of strong gains in equity markets, to conclude that we have returned to a world of double digit investment returns, the medium-term outlook remains for high single digit returns from equities, and low returns for bonds, warns Dr Shane Oliver, AMP Capital Investor’s chief economist and head of investment strategy.

“Relatively low yields on mainstream equities and bonds suggest their average returns over the medium-term (5-10 years) will be relatively low,” Oliver says.

Investors should therefore readjust their return expectations to more realistic levels, argues Oliver. “Investors should also expe...