Goldman Sachs 118 Page Market Outlook: 3 Major Takeaways
Goldman Sachs’ 2025 outlook points to muted equity returns and higher volatility, so Vintage Capital is tilting portfolios toward private, income-oriented alternatives to boost yield and buffer risk.
We just read Goldman Sachs full 2025 market outlook. It's a beast.
Here are our three main quotes / takeaways:
Expect lower returns compared to the past decade's record bull market, given high valuations and economic uncertainty.
“Investors should be prepared for greater volatility and consider rebalancing their portfolios.”
"Diversification into income assets and alternative investments is recommended to hedge against market volatility"
A couple of our investors recently asked for Vintage Capital’s thoughts on the market given the recent spike in volatility.
Over the short term?
We have no idea and wouldn't wager a bet. Ignore anyone that gives you a prediction with any confidence.
Over the medium term?
The (S&P 500) is expensive, top heavy and is likely to disappoint over the next 5 years.
See the graphs below from JP Morgan, who basically agrees with Goldman on the above.
These are regressions that analyze starting price vs. forward returns (1 vs. 5 years).
Over a one year time period (the left graph), starting valuation is useless information. Results are random.
Yet over 5+ plus years, starting price (while not perfect) is more useful.
JP Morgan's research suggests we should expect mid-single digit forward returns (~5%) from the S&P 500. Ouch. That is just a tad bit lower than the record 13% we've seen the last 10 years.
Therefore, if you're an accredited investor, it's probably time to add a healthy amount of non-correlated assets to your stock market holdings.
For them our portfolio recommendations are heavily skewed (25-50%) towards private assets in an effort to boost returns, income and mitigate downside risk.
Thank you,
Vintage Capital
