$SPY (+0,85 %) Goldman Sachs dropped a report in October that's colder than a polar bear's nose!
Their analysts are predicting a serious slowdown for the S&P 500, forecasting an average annual nominal return of just 3%over the next decade. To put that in perspective, the index has been cruising along at a cool 13% average annual return for the past 10 years. Talk about a market mood swing! It's enough to make you want to sell all your stocks and invest in a lifetime supply of ramen noodles (though I wouldn't recommend that, unless you really like ramen).
Why So Glum, Chum? Decoding the Doom and Gloom
So, why is Goldman Sachs suddenly channeling their inner Eeyore? Well, they seem to think the market is currently more overvalued than a beanie baby collection in 2024. (Okay, maybe not that bad, but you get the idea.) Their fancy statistical model, which factors in everything but the kitchen sink, suggests we're headed for a period of "meh" returns.
Here's a peek at the variables swirling around in their crystal ball:
Adding Insult to Injury: Bonds and Inflation Join the Party
To make matters even more interesting, Goldman Sachs says there's a 72% chance the S&P 500 will underperform bonds over the next decade. And wait, there's more! There's also a 33% chance it won't even keep up with inflation. (So, you might end up with a bigger number in your investment account, but it'll buy you less stuff. Kind of like how a bag of chips seems to get smaller every year.)
Want more? read my full analysis with valuation and history analysis in my Substack :
https://waver.substack.com/p/a-decade-of-discontent-goldman-sachs
