Name: Goldman Sachs predicts a lost decade for U.S. equities
Uploaded: 2025-11-13T00:47:02.529Z
Duration: 2 min 14 s
Description: Strategists at Goldman Sachs expect U.S. equities to keep lagging global peers for the next decade. Peter Oppenheimer and his team recommend that investors increase diversification beyond the U.S. They see the S&P 500 returning an average 6.5% over the next 10 years.

Strategists at Goldman Sachs expect U.S. equities to keep lagging global peers for the next decade. Peter Oppenheimer and his team recommend that investors increase diversification beyond the U.S. They see the S&P 500 returning an average 6.5% over the next 10 years.

Washington

Goldman Sachs analysts have projected a challenging decade ahead for U.S. equities, emphasizing that recent market concentration and high valuations may limit future gains. The report points to ongoing structural reforms and improved nominal GDP growth as positive factors, but notes that these may not be enough to sustain significant outperformance in American stocks.

Instead, the analysts highlight emerging markets, particularly in Asia excluding China and Japan, as areas with strong growth potential. They suggest that advancements in artificial intelligence and demographic trends could drive higher productivity and average annual growth rates of around 10 percent in these regions, making careful country selection and risk assessment crucial for investors.

Goldman Sachs predicts a lost decade for U.S. equities

Yeah that's what they're thinking. And it's not just on the valuations which obviously have been talked about a lot in the last couple of weeks as we're all worried about the concentration and leadership and how far the trade is gone. But also they see structural reform and they see better nominal GDP growth. And with that it's not just better growth because of inflation also going up but more contained inflation creating a better backdrop for financial conditions to loosen and allow equities to kind of outperform. And this is obviously going to be different between every year. They're all their own unique butterflies. But overall if you lump them together there are structural reforms in place and there's a better growth dynamic that should boost earnings and margins on the kind of margins will also be better defended. I suppose they're not expected to necessarily blow out but they're not expected to contract on pressures from idiosyncratic stories. But people love to make this prediction. It usually doesn't come true. Last year when people said it did this year we have seen those markets outperform. Who's to say that that's really going to last. Because if you were to have traded on valuations in the past decade you probably would have missed out on a lot of American equity gains. Right. I think it's a little bit. You have to be careful. Like obviously there's ways for investors to buy the basket of EM. But overall like I said there's going to be these individual stories are going to be outperformances. They also did highlight basically Asia X China and Japan is looking pretty strong. But you are going to have to pick your countries. You are going to have to be very clear on what your target is because there are always these shocks and they come out of nowhere often. And to your point we get these good narratives going and something unforeseen comes and knocks everything off. Right. The way I read it it's not just about valuations. It's also the idea that at least in terms of the emerging markets call which I think he said is going to see 10 percent average annual growth. The idea is that A.I. is going to provide more productivity to those economies than it will to our our more developed economies. Yeah. And super interesting because we're just talking about that whole power part. If EM starts to look at sort of the open source algorithmic advancements that the Chinese A.I. are pushing that's less power it's less infrastructure potentially for data warehousing. I'm not an expert on this. We can bring others on to speak to power hungry. Exactly. And this is always a constraint. As the demographics grow in some of these countries there's going to be more of a jostle for who gets that power. Whereas in America and the West some of that's already set with our demographics being more stable.

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