Investors should prepare their portfolios for long-term low inflation and economic growth, Fahad Kamal, chief market strategist at wealth manager Kleinwort Hambros, has said.
Mr Kamal noted that many in the market have avoided bonds as they prepared portfolios for bond yields to move higher, expecting wage growth to lead to higher inflation.
That would force central banks to put interest rates up, meaning the value of existing bonds would fall.
Investors also likely want to avoid investments in bonds because the fixed income from a bond would have less spending power as inflation rises.
But Mr Kamal cautioned against taking too negative a stance on bonds.
He said: "Equities are our favourite asset class right now, but we do have government bonds in portfolios as well.
"This is because we think the global growth seen in 2017 is as good as it is going to get.
"If you look at the world since 1900, from 1900 until 1950, growth was low and inflation was low, that was because the structural growth rate was kept low by the lack of population growth."
He said the second half of the 20th century saw much stronger growth because populations grew, and later because of the industrialisation of China bringing more workers into the world.
Economists generally take the view that the long-term potential growth rate of an economy is determined by growth in the working age population and growth in the productivity of workers.
Mr Kamal said the trend of rising populations has stopped, leaving the growth rate lower, while debt levels are higher, which acts to put a brake on growth and inflation.
He said: "One of the factors that kept inflation low was the transfer of production to China, and the pace at which that happened.
"And while there isn’t another China on the horizon, nothing can replace that effect, the other factor that has kept inflation lower in the last forty years compared with the previous forty is that central bankers have quite simply got better at dealing with inflation, and that stops it getting out of control."
The equity markets he favours right now include Japan, which he regards as "very cheap" and emerging markets.
Ben Edwards, who runs the BlackRock Strategic Bond fund which has just reached its third anniversary since launch, takes a similarly cautious view of inflation.
He said: "One of the reasons wage growth hasn’t happened as much in developed markets as was expected due to the low unemployment rate is that millions of Chinese workers, when they entered the labour market, effectively meant that the wage gains from economic growth didn’t all just go to the US industrial worker as happened in the past, it was shared with Chinese workers."
Mr Edwards added: "Technological advance is also disinflationary, so really, all of the factors that have contributed to low inflation in the past decade are still there, the US Federal Reserve approach to interest rates, or some wage growth coming through, doesn’t change that."