Why clients need to adjust return expectations

World economic growth is fragile, and will continue to be for some time.

Read: Global economic growth to remain fragile: Report

As a result, we’ll see single-digit portfolio returns this coming year. And interest rates will average 2.5% or 3% over the next few years, rather than returning to past highs of around 4%, according to the expert panel at today’s Economic Club of Canada 2015 outlook breakfast.

Read:

• Fed may hike rates by mid-2015
• Downside risks grow as stocks grind upward

This year’s panel featured:

• Craig Wright, chief economist at RBC;
• Warren Jestin, chief economist at Scotiabank;
• Paul Mortimer-Lee, chief economist at BNP Paribas;
• Stéfane Marion, chief economist at National Bank of Canada;
• Craig Alexander, chief economist at TD Bank Financial Group;
• Avery Shenfeld, chief economist at CIBC World Markets; and
• Doug Porter, chief economist at BMO.

Overall, the experts are optimistic about long-term global growth, but expect the U.S. to outpace other economies in 2015 due to interest rate fears, and pressure from commodities and currencies.

Further, they agree there have been significant structural changes in markets and economies since 2008, which means investors have to adjust their return expectations. Further, people must realize that slow global growth in the near term may lead to more stable, sustainable expansion in the future.

Read:

• Will Canada outperform in 2015?
• Short-term bonds are overvalued

For more tips and insights from the panel, see the selection of assistant editor Katie Keir’s live tweets below. Also, read more from Katie Keir and, to see more live tweets, follow @katiekeir.

Live tweets from Ecomonic Club of Canada 2015 outlook event

The issues we’re addressing today impact all Canadians; just think about gas prices, and how consumers and families help drive economies, says ‪@ECofCanada

‪‪@Scotiabank‘s Warren Jestin says everything has changed since last year. Before, Europe was coming out of recession, but it’s in trouble again. And the story in China and Asia is uneven, though growth is still expected to stick around 7% in 2015

Not surprisingly, commodity currencies and resource-dependent countries will lag, says Jestin ‪@ECofCanada

Read: Economies and stock markets to have weak 2015: CFA poll

‪‪‪@RBC‘s Craig Wright says Canada will have two, opposite driving forces: low business investment, but also support from U.S. economy @ECofCanada

Although oil price weakness will continue, says ‪@BMO‘s Craig Porter, export volume will be good. So Canada’s GDP could be 2.2%, with some downside risk

Meanwhile, inflation will average 1%, down from around 2%, and dollar may drop to around US$0.83 through the year ‪@ECofCanada

Consumers will be the engine of the U.S. economy, says Wright, and it’s expected to grow around 3% ‪@ECofCanada

Regarding ‪#oil Porter says crude will average price of $60 per barrel in Canada ‪@ECofCanada

Read: Oil got you down? Consider metals

Europe’s fighting an inflation war today, says Mortimer-Lee. ECB policy will be aggressive in 2015 since the central bank needs to achieve price stability ‪@ECofCanada

Politics is important in Europe because if there’s no growth and no hope, people could turn to radical politics, adds Mortimer-Lee ‪@ECofCanada

Avery Shenfeld says between world & U.S. is a tale of two economies: U.S. will hike interest rates earlier, but other countries lag behind

In coming years, interest rates will average around 2.5% and 3%, rather than past-year highs of around 4%, says Shenfeld @ECofCanada

On upside, we’ll see mild recovery of oil sector in 2nd half of the year. So will be “Dawn of the Dead” story in 2015: Shenfeld ‪@ECofCanada

For equities, we’ll see single-digit returns, partly due to interest rate fears. People may move back to cyclical stocks by 2016 ‪@ECofCanada

Hard to give oil outlook, but India & China will be strong performers. If can stabilize global production, ‪#oil prices could rise to $70, says Marion