Investors should be prepared for equity returns during the next decade that are towards the lower end of their typical performance distribution relative to bonds and inflation.
Goldman's lower stock market return outlook for the next decade was influenced in part by its estimate that the U.S. GDP will contract over four quarters during the next ten years, or about 10% of the time.
The market cap of the 10 largest companies on the S&P 500 account for more than a third of the overall index.
As sales growth and profitability for the largest stocks in an index decelerate, earnings growth and therefore returns for the overall index will also decelerate.
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