The 2010s are over, and by now, you’ve surely been inundated with nostalgic stories of how much the world has changed over the past decade. When it comes to investments, most of the recaps we’ve seen follow a similar narrative: It’s been a great decade for investors.

You can’t argue with the results. U.S. stocks returned more than 13% annualized in the 2010s, well above their long-term average of about 10%. Most equity indices have reached new all-time highs this year, and volatility has been very low. There was only one negative calendar year out of the past 10, and on a volatility adjusted basis, the 2010s were one of the best decades ever for U.S. stocks.

At the beginning of 2010, this type of performance might have seemed unlikely. The economy was just coming out of a major recession and financial crisis. Worries remained about overall global economic health and levels of debt. But despite this backdrop, the stock market went on to have one of its best runs of performance ever. Investors who stayed the course have certainly been well rewarded.

That’s where most investment recaps stop. But there remains an important question, especially for non-profit investors: what comes next? After a decade like we just experienced, and especially after a year like 2019, it’s natural to think the party might last forever. Investors can be lulled into a sense of complacency, but at some point the environment will shift and non-profits need to have realistic expectations for the future, especially for portfolios with ongoing withdrawal needs.

One way to think about the future is to look at today’s fundamentals. Compared to overall earnings in the economy, stocks are priced for perfection; not surprising given the tremendous run-up in prices this decade. In our view, this makes it unlikely that strong stock market performance can continue although the timing of when a reset might occur is anyone’s guess. Low interest rates in bonds will be a challenge, and leading indicators of economic growth have declined, suggesting that growth is decelerating. It remains unclear whether we are headed for a recession, but whether the economy rebounds or continues to slow, the underlying fundamentals still suggest caution.

Another way to think about the future is by taking a fresh look at your planning efforts. No one can know for certain what the future will hold, so rather than try and predict the exact outcome, why not assume a range of possibilities? The 2010s were probably one of the more favorable scenarios for non-profit investors, but what if the next decade is the start of a period of below average returns? Start with a base case model of average returns and withdrawals, then run it through the paces by looking at how your portfolio performs under a bear market scenario or below average long-term returns. You don’t need to be a fortune teller to be a successful investor, but you do need do have discipline to see your portfolio through the difficult times. A dynamic planning process can be a good way to do this.

For us, looking toward the future isn’t about trying to perfectly time the next downturn. It’s simply about setting realistic expectations. The fundamentals suggest caution is warranted and that the next ten years could be very different from the last ten. Having a flexible investment and planning process can go a long way to help your organization prepare for any difficulties that arise.