Howard Marks sees “cautionary signs” in the market and holds a tepid outlook for financial markets over the long term.

Investors’ returns over the next decade “depends on whether they have access to nontraditional investments,” Marks said in an interview Wednesday on CNBC’s “Squawk Box.”

The Oaktree Capital co-chairman said investors can get 5 to 6 percent nominal annual returns with the use of alternative investments.

“Stock and bond markets are not likely to deliver that,” he said. “I think that if you look objectively at the market, you see cautionary signs.”

BlackRock CEO Larry Fink told CNBC on Tuesday that investors should expect just 4 percent annual returns over the next 10 years with a portfolio of stocks and bonds.

Marks, whose firm had $99 billion of assets under management as of June, also said the market has already priced in the upside from the potential passage of tax reform.

The S&P 500 has rallied 20 percent since the Nov. 8 election through Tuesday.

“Given expectations I think we are unlikely to have a favorable surprise,” he said. “So I don’t think that we’re going to see tax reform [passing, then] a rising market, unless something happens which is better than I think can happen.”

Marks is known for his prescient investment memos, which warned about the financial crisis and the dot-com bubble implosion.

He appeared from Riyadh on the sidelines of the Future Investment Initiative, a conference presented by Saudi Arabia’s sovereign wealth fund.