他们还认为，Goldman Sachs estimates that the annualized nominal total return rate of the S&P 500 index in the next ten years will be only slightly higher than 3%, significantly lower than the 13% of the past decade. By the end of 2034, the S&P 500's return rate will have about a 72% chance of falling behind US bonds, with a 33% chance of falling behind inflation.
Goldman Sachs believes that as investors turn to other assets, including US bonds, in search of better returns, US stocks are unlikely to maintain the performance above average levels of the past decade.
In the research report released last week, Goldman Sachs strategists such as David Kostin predicted that the annual nominal total return rate of the S&P 500 index in the next ten years will only be slightly higher than 3%. By comparison, this figure was 13% in the past decade, with a long-term average of 11%.
They also believe that by the end of 2034, there is about a 72% probability that the S&P 500 return rate will lag behind US bonds, and a 33% chance of falling behind inflation. Goldman Sachs wrote:
The future ten-year return rate of US stocks is likely to be close to the lower end of its typical performance distribution, and investors should be prepared for this.
After the global financial crisis, US stocks have been on a rise, mainly benefiting from central bank's low interest rates and government's large-scale stimulus policies. As the Federal Reserve restarts its rate-cutting cycle, according to data compiled by Bloomberg, the S&P 500 index still has a chance to outperform other regions globally this year, leading for the eighth year in the past decade.
However, it is worth noting that this year's 23% rebound in US stocks is mainly concentrated in a few large technology stocks. Goldman Sachs strategists stated that they expect the return rate in the coming decade to be more favorable in large-cap diversification, where the equally-weighted S&P 500 index will outperform the index's market cap-weighted performance.
Even if the uptrend remains concentrated, Goldman Sachs still believes that the return rate of the S&P 500 index in the next ten years will be below average, at approximately 7%.
