After a year of nirvana, investors may need to get ready for something a little more normal.

“People need to have a more realistic expectation of what returns are going to be.”

Markets are coming off a fabulous 2019, where stocks and bonds around the world climbed in concert. But for the next year — and decade, in fact — Wall Street is telling investors to set their expectations considerably lower.

It’s not calling for another crash like the U.S. stock market suffered just over a decade ago. Or for another run like the last 10 years, where the S&P 500 returned more than 13% on an annualized basis. A gain less than half of that may be more likely, both for next year and annually for the coming decade.

“People need to have a more realistic expectation of what returns are going to be,” said Greg Davis, chief investment officer at Vanguard. “That means investors who are saving for retirement or for college education will likely need to set aside more, because returns won’t be as generous as what we’ve seen over the last decade.”

It’s not because Wall Street sees the U.S. economy falling into a recession, at least not in 2020, even though that’s been a recurring fear for much of the last decade. Much of Wall Street expects the economy to chug modestly higher next year.

Instead, it’s a simple matter of math. Stocks and bonds don’t have as much room to rise after their stellar 2019, analysts say. Starting points matter, and investments began this year at a low point after recession worries pounded markets in December 2018. U.S. stocks will start 2020, meanwhile, close to their highest levels ever.

Wall Street has been busy trying to rein in expectations.

Vanguard forecasts U.S. stocks will return 3.5% to 5.5% annually over the coming decade. Even toward the top end of that range, it’s only half what the market has returned historically. Foreign stocks might offer a bit more, at roughly 7.5% annually, but U.S. bonds look set to offer only 2% or 3% annually over the next decade, according to Vanguard.

Of course, any prediction about where investments will end up is only a guess, no matter how educated. Many on Wall Street came into this year expecting only modest returns given all the worries about interest rates and a possible recession. Now, the S&P 500 is about to close out its second-best year of the last two decades.

But for bonds, the reasons for lower expected returns are easy to see. Bonds pay much less in interest than one or 10 years ago. The 10-year Treasury now has a yield of 1.91%, versus 2.82% a year ago and 3.54% a decade ago. For bonds to return more than their yields, rates will need to drop even lower.

Some banks along Wall Street have relatively healthy expectations for stocks in 2020 — but few if any are calling for a repeat of 2019’s surge for the S&P 500, which was at 28.5% as of Tuesday morning. Bank of America Merrill Lynch sees the index ending 2020 at 3,300, which would be a 2.5% rise, for example. Goldman Sachs is more bullish, with a target of 3,400, but that would still be less than a quarter of this year’s gain.

Stocks are more expensive than a year ago on a host of different measures. One of the most commonly used is how a stock’s price compares to its profit over the preceding year. By that measure, the S&P 500 is trading at 21.1 times its earnings. That’s more expensive than at the start of the year, when it was at 16.5, or its average over the last two decades of 17.7, according to FactSet.

Low interest rates should help keep this price-earnings valuation high, analysts say. So will a U.S.-China trade conflict that’s hopefully no longer ramping higher, analysts say. The diminished threat of a recession should keep investors willing to pay relatively high price-earnings ratios. But the threat of policy changes in Washington, D.C., could act as a counterweight.

“There is a lot of nervousness around the elections,” said Lisa Thompson, equity portfolio manager at Capital Group. “The elections could provide some interesting opportunities for investors, particularly in the first half of the year.”

She’s the type of investor who sees volatile markets, where prices are swinging higher and lower, as “interesting opportunities” because she can use them to buy stocks she likes at lower prices.

President Trump has ushered in lower taxes and lighter regulations for businesses, which investors have seen as incontrovertible wins for investments regardless of their politics. Democrats running to unseat him, meanwhile, could reverse that momentum and target some industries in particular, such as health care. That could lead to big swings for stocks early in 2020 as Democratic candidates try to stand out in a winnowing field.

Even if the worst-case scenario were to come to pass, though, and the economy were to fall into a recession, many professional investors say they aren’t worried about a crash like 2007-09 where stock investors lost more than half their savings. Investors have remained hesitant to plow their money into stocks, even after this decade-long run, so fund managers say they don’t see grossly overvalued markets as there were just over a decade ago.

“When the cycle does end, we don’t see bubbles out there like in 2008, 2009,” said Saira Malik, head of equities at Nuveen. “I think people are nervous.”

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