Given the huge changes in inflation expectations and abrupt yield changes of the past six months, it seems sensible to re-assess expectations for capital market returns. Longterm investors update and review long-term strategic assumptions on a set cycle, which we see as the right way to deal with the difficulties of making forecasts that stretch far into the future. However, we suggest that there should be flexibility to review these forecasts when large shifts take place. In our view, now is such a time.
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