Investors will face the twin threats of higher wage growth and lower economic growth denting their returns in 2019, according to Anthony Rayner, who jointly runs a range of four multi-asset funds at Miton.
Mr Rayner said: "2019 might well be driven by how financial markets respond to a broader slowing in the global economy.
"In this context, a key focus will be how central banks respond to stubbornly rising wage pressures at a time when growth looks to be slowing.
"Indeed, this is the first time in a while that central banks have been confronted with stubborn wages growth, or any vaguely threatening inflationary pressures, for that matter."
More generally, Mr Rayner said he expects politics to remain a dominant driver of financial markets, in large part as there is little reason to believe that populism has peaked.
So, rather than return to a period of traditional politicians with traditional policies, Mr Rayner said he expects to see a continuation of simple answers for complex issues and changing allegiances globally.
He said: "Financial markets struggle to price political risk but will struggle even more in this type of scenario. Additionally, as quantitative easing fades, investors will have to work harder to find investment opportunities."
The challenge Mr Rayner is describing is that central banks, when presented with rising wages, typically take action to curb inflation by putting interest rates up.
But higher interest rates act as a curb on economic growth, and so worsens the problem of slowing growth in the economy.
Both higher wages in the economy and slowing economic growth are likely to mean reduced returns for investors in 2019 as company profits fall.
Mr Rayner said: "As a result of the above, we remain broadly defensive. Our equity weight is lower than normal, with a strong bias for developed markets over emerging.
"Within bonds we retain a short duration, to minimise interest rate risk, and credit risk remains towards the better quality end of the spectrum.
"We retain an exposure to diversified property, some exposure to gold and an elevated cash position."