Half Full: The Case for Remaining Invested in US Equities

Goldman Sachs Exchanges

Julia McGonagle

Business

4.4 • 1K Ratings

🗓️ 17 January 2017

⏱️ 29 minutes

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Summary

US equities have returned nearly 300% since the trough of the global financial crisis, and now sit at historically high valuations. Sharmin Mossavar-Rahmani, chief investment officer of Private Wealth Management at Goldman Sachs, says that high valuations alone are not enough to warrant underweighting equities. What's important is context: she explains her optimism towards the US economy, as well as the potential risks to her views. This podcast was recorded on January 10, 2017. The views and opinions expressed herein should not be construed as an offer to buy or sell any securities and such views/opinions may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. This information may not be current and Goldman Sachs has no obligation to provide any updates or changes. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty, as to the accuracy or completeness of the statements or any information contained in this podcast and any liability therefor (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed. Goldman Sachs is not providing any financial, economic, legal, accounting or tax advice in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by any Goldman Sachs entity or individual to that listener, nor to constitute such person a client of any Goldman Sachs entity. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk. Copyright 2017 Goldman Sachs. All rights reserved.

Transcript

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0:00.0	This is Exchanges of Goldman Sachs where we discuss developments shaping markets, industries, and the global economy.
0:14.0	I'm Jake Seward, Global Head of Corporate Communications here at Goldman Sachs.
0:18.0	As 2017 begins, investors are trying to position themselves for new opportunities and new risks in what's sure to be a year of
0:25.3	transition for countries all around the world. My guest today is Charmian Mosseva R. Romani, the chief
0:30.5	investment officer of private wealth management here
0:32.8	Goldman Sachs she makes the case in a new report for US equity
0:36.9	preeminence amidst an uncertain global and domestic backdrop.
0:41.8	The report's called Half Full. Welcome, Charmaine.
0:44.6	Thank you.
0:45.6	So since the trough of the global financial crisis, you've consistently, very consistently
0:51.4	emphasized U.S. preeminenceence the idea that the United States
0:54.4	offers the best opportunities for investors and you've advised clients to
0:58.4	maintain a strategic overweight to US equities. US equities have been more expensive than current levels only 10% of the time in the post
1:06.5	World War II era. In the outlook half full, you continue to recommend staying the course.
1:11.8	What drives the case, your case, for remaining invested staying the we focus on in terms of this recommendation. First, the general economic backdrop. So we are looking
1:26.2	at the U.S. economy that is growing and will actually have better growth rates in 2017
1:31.3	than 2016. We look at all other developed economies and with the
1:35.1	exception of the UK party driven by Brexit we expect broad-based growth in
1:40.5	other countries so a generally favorable economic backdrop in developed
1:45.8	economies. In emerging market countries we think places like Russia and Brazil
1:49.9	that we're in recession will have a modest recovery and we're looking at emerging markets and aggregate a modest improvement.
1:56.6	So generally a very favorable economic backdrop.
	...

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