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The Goldman Sachs Wealth Management Investment Strategy Group (ISG) has released their 2024 Outlook — America Powers On.
Watch Sharmin Mossavar-Rahmani, head of ISG and chief investment officer of Goldman Sachs Wealth Management, review key themes from this year’s Outlook.
US equities continued to outperform other regions in 2023, as they have done since the global financial crisis trough in March 2009. Over this period, ISG’s two primary investment themes of “US Preeminence” and “Stay Invested” have served clients well as the market experienced a ninefold increase in US equities.
Inevitably, after such a long run of US equity outperformance, clients are asking two questions. First, has the time come to reduce their strategic asset allocation to US equities with a long-term shift toward non-US equities? And second, should they tactically underweight US equities with a short-term shift toward cash, bonds or non-US equities? ISG’s answer to both questions is a resounding no.
ISG’s long-standing view of US Preeminence remains intact, based on the country’s unparalleled combination of the following factors:
These factors are set to persist into the foreseeable future and endure even in the face of social, cultural and political fissures. In short, America powers on with no sign of others in the rear-view mirror.
While ISG acknowledges that US equities are expensive, both on an absolute basis and relative to non-US equities, they recommend clients stay invested in US equities at their customized strategic asset allocation weight and not shift toward bonds, cash or non-US equities.
However, ISG does not expect US equities to outperform other equities by the same magnitude; nor do they expect high absolute returns from US equities.
In their Outlook, ISG notes seven key reasons for staying invested in US equities relative to non-US equities:
Additional key takeaways from ISG’s 2024 Outlook include:
If the Outlook sparks any questions about your personal situation, connect with your Goldman Sachs advisor. Don’t have a Goldman Sachs advisor? Contact us
1 Source: Based on the Goldman Sachs Wealth Management Investment Strategy Group 2024 Outlook — America Powers On; Refer to the report for full disclosures.
Advisory services offered by The Ayco Company, L.P. (“Goldman Sachs Ayco), a registered investment advisor and an affiliate of Goldman Sachs & Co. LLC (“GS&Co.”) and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization. Brokerage services are offered through GS&Co. and Mercer Allied Company, L.P. (a limited purpose broker-dealer), both affiliates of Goldman Sachs Ayco and members FINRA/SIPC
** The Investment Strategy Group, part of the Asset & Wealth Management business (“AWM”) of GS, focuses on asset allocation strategy formation and market analysis for GS Wealth Management. Any information that references ISG, including their model portfolios, represents the views of ISG, is not financial research and is not a product of GS Global Investment Research and may vary significantly from views expressed by individual portfolio management teams within AWM, or other groups at GS. Past performance is not indicative of future results which may vary.