Much is written on these topics individually, but their economic impact is most clear when they act in concert to imply the same directional outcome for macro variables.

The implication: investors should expect a higher equilibrium level of inflation, lower real growth and lower margin – reversing some trends from recent decades and implying a new investment regime. That might sound like a bearish conclusion, but there is still a plausible path for major asset classes to produce positive real returns.

The key conclusion for strategic asset allocation is the need to balance risk to the purchasing power of long-term savings and risk as measured by volatility. AllianceBernstein's central case assumes a strategic allocation to equities and a range of other real assets to generate the required positive real returns.

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