Nobel Prize-winning economist Robert Shiller has a grim message for investors: Save up, because in the years ahead, assets aren't going to give you the type of returns that you've become accustomed to.
Shiller says that stock valuations look rich. In fact, Shiller's favorite valuation measure, the cyclically adjusted price-earnings ratio (which compares current prices to the prior 10 years' worth of earnings) is "higher than ever before except for the times around 1929, 2000, and 2008, all major market peaks," he writes in his new preface to the third edition of his book - Irrational Exuberance.
The other pillar of his advice is a classic tenant of responsible investing..."Diversify, because that helps reduce risk, " Shiller said. "The future is always coming up with surprises for us, and the best way to insulate yourself from these surprises is to diversify," Shiller said.