Investors excited by the boost the US election gave to US stocks should recall that starting conditions matter. This is not 1981, the beginning of the Reagan era.

When Ronald Reagan took office 36 years ago, the US economy was in a deep recession induced by extremely high interest rates intended to wring out inflation. Back then, the S&P 500 was trading at around nine times depressed forward earnings, as the Display below shows.

When Donald Trump took office, the S&P 500 was trading at about 18 times forward earnings—and earnings were close to all-time highs. Yet, the fed funds rate was around 0.5%, and the 10-year Treasury rate, about 2.5%. While both interest rates are higher than a few months ago, they remain close to all-time lows, and are poised to go higher.

We expect below-average returns for almost all asset classes over the next five years. Over the long term, bond returns are typically in line with starting yields: We expect bond returns of about 1% over the next five years, far below their 20-year averages, as the next Display shows, Rather than getting a huge boost from falling interest rates, as in the 1980s, bond prices are likely to be depressed by rising rates.

But returns will likely be positive for intermediate-duration fixed-income portfolios. While bonds may occasionally fall quickly in price, the increase in yield should replace market losses within a year or two.