Institutional investors should avoid the temptation to oversimplify their portfolios in the year ahead and actively seek diversification, a new report from Boston-based Cambridge Associates recommends.

Institutions may be tempted to seek simple asset allocations in a climate of increasing political and economic uncertainty, particularly given that these portfolios have delivered strong returns in the years since the global financial crisis, according to the report. Yet, it says this investment performance “is unlikely to be repeated over the coming decade.”

Investors should be wary of sticking to strategies that have worked in the recent past, the report warns. In particular, it advises against strategies that were designed to capitalize on a falling interest rate environment given that the interest rate cycle appears to be turning. The report also cautions investors against ignoring the risk of rising inflation.

In the year ahead, investors “would be wise to avoid oversimplifying their portfolios,” the Cambridge report suggests, recommending that they should also be cautious about making big bets on political developments, and other macroeconomic events.

“As we move further into 2017, institutional investors should place a premium on diversification,” says Celia Dallas, chief investment strategist with Cambridge, in a statement. “The siren song of the simplified portfolio may be difficult to resist, given the ongoing bull market. But diversified portfolios provide a better long-term strategy for endowments, foundations, pensions and any institution seeking to preserve or grow its purchasing power, while supporting a steady flow of spending into the future.”

In addition, the report warns against taking too much market risk so late in a bull market cycle; to remain aware of currency risk; and to resist the temptation to curb exposure to defensive assets in an effort to increase performance.

“The smartest institutions maintain a long-term perspective, informed by the long span of history with an understanding of how world events may shape the future,” Dallas says. “Diversified portfolios help investors set up for success over decades of market cycles to come, by looking to participate strongly in market upside, while having enough varied defense to manage liquidity needs and other risk requirements during difficult times. Amid today’s political and economic uncertainty, it’s critical to remain vigilant, and avoid the temptation of an undiversified portfolio.”