16 JAN 2020

Room to Grow

Investment Strategy Group
Goldman Sachs Private Wealth Management
January 2020


After more than 10 years of steady US economic growth and nearly 11 years of a US equity bull market as measured by the S&P 500 Index, it is hard to imagine that both have room to grow. Yet that is our 2020 base case. The US economy is likely to continue growing and US equities are likely to continue rising—albeit more slowly than in the last decade. 

In this year’s Outlook, we show through data and analysis why we believe that the risks of recession, while relatively higher than those described in our 2019 Outlook, have not yet reached levels that warrant an underweight in equities. Most importantly, we provide a more extensive review of why valuation alone is not an effective signal for underweighting equities, but a far more useful signal for overweighting equities.

Of course, we remain vigilant. Bouts of volatility are inevitable, especially in a presidential election year, and investor sentiment can shift quickly in response to geopolitical headlines or negative economic surprises.  While we remain mindful about the broad range of risks that could undermine this recovery and bull market, our recommendation to stay invested remains intact. Like the sturdy baobab tree, which lives far longer than most trees (reportedly up to 2,500 years), this expansion appears poised to continue beyond what is typical.

We invite you to read our views and investment recommendations in Outlook 2020: Room to Grow.


Goldman Sachs Private Wealth Management regularly publishes insight and commentary on investment and wealth management topics for our clients. To pursue a conversation on this topic, please contact a private wealth advisor.

The Investment Strategy Group is a part of the Consumer and Investment Management Division of Goldman Sachs and is not a part of the Goldman Sachs Global Investment Research (GIR) Department. The views and opinions expressed by the Investment Strategy Group may differ from the views and opinions expressed by GIR or other departments or divisions of Goldman Sachs.