"American investors are worried. They've been worried for a while now: that a recession is coming, that stock valuations are overheated, and that AI spending is the only thing keeping the economy (and markets) afloat. And if you're in the wealth management business, like Goldman Sachs, it's your job to listen to these concerns. To nod solemnly and empathize as your millionaire clients lay bare their greatest fears."
"'Clients - and also some colleagues - are now asking whether it is time to reduce exposure to US equities in favor of other developed and emerging markets,' the firm's Investment Strategy Group wrote in its 2026 outlook report. But it concludes that many of the perceived risks dominating conversations these days - from tariffs to government dysfunction to market concentration - are overstated, and that the most significant risk for equities, a US recession, is unlikely."
Investors have long worried about recession, overvalued stocks, and reliance on AI spending. Goldman Sachs' wealth management team asserts those concerns are overblown and advises against reducing US equity exposure. The Investment Strategy Group lowers the recession probability to 25% from about 35% and projects continued economic expansion and robust S&P 500 earnings growth. Perceived risks such as tariffs, government dysfunction, and market concentration are assessed as exaggerated. The firm cautions that the most notable vulnerabilities lie in potential bubbles for bitcoin and generative AI, while overall US markets remain in good shape.
Read at Business Insider
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