Goldman Sachs Sounds Alarm: S&P 500 Could Lag for a Decade—Time to Rotate?
Wall Street's crystal ball looks bleak. Goldman Sachs just dropped a bombshell prediction: the S&P 500 might be dead money for the next 10 years. Ouch.
The grim forecast
No sugarcoating here—Goldman's analysts see structural headwinds crushing traditional equity returns. Inflation? Check. Rate hikes? Check. The usual Wall Street playbook's getting shredded.
Where smart money's looking
While dinosaurs fight over shrinking stock returns, crypto's eating their lunch. Decentralized finance doesn't wait for Fed permission slips. (Take that, legacy finance.)
Bottom line
Goldman's warning shot should terrify index-fund zombies. Adapt or get left behind—the market's separating the quick from the soon-to-be-obsolete.
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“We expect higher nominal GDP growth and structural reforms to favor EM, while AI’s long-term benefits should be broad-based rather than confined to US technology,” wrote the strategists in a note.
Global Rivals to Outpace S&P 500, Says Goldman
The strategists added that the S&P 500’s net profit margin and return on equity (ROE) are NEAR record highs, and the tailwinds that support these measures may not be as strong in the future. The index is also trading at an elevated forward price-to-earnings (P/E) ratio of 23x, well above its 20-year average of 16x.
Furthermore, the underperformance of U.S. equities may have already begun. The S&P 500 is up by 16% this year compared to the MSCI World ex USA Index at 27%.
