In his weekly market update, AMP Capital chief economist Shane Oliver said global economic conditions might be "so good that they are bad".
Global business and consumer confidence readings are constantly at record or near-record highs, Mr Oliver said.
"A concern is that historically it doesn’t get much better than this and we saw how similar readings around 1999-2000 and 2006-2007 ended badly," he said.
"The big difference this time compared to those periods of similar highs in confidence readings is that at those peaks inflation was becoming more of an issue and global monetary policy was tight and bearing down on growth, whereas now inflation is still low and monetary policy remains easy."
In other words, global investment markets are still in the "sweet spot" in the investment cycle – which, admittedly, is one of the longest cycles in recorded history.
"[It] augurs well for further gains in growth assets albeit share market volatility is likely to rise and returns are likely to be more constrained this year as inflation starts to rise in the US and geopolitical risks become a focus again," Mr Oliver said.
Turning to the Australian shares specifically, Mr Oliver is expecting returns to be around the 8 per cent mark.
His 2018 year-end prediction for the ASX 200 is 6,300.
