Interview
"Catch-Up With David": with Goldman Sachs' Sharmin Mossavar-Rahmani
- Goldman Sachs projects a base case global return of 9% for 2019, a target already met within the current year, and anticipates market conditions will align with this outlook.
- Strategic asset allocation is expected to favor the U.S. over the coming decade due to enduring factors of American preeminence, including strong institutions, the rule of law, and checks and balances.
- U.S. equities are forecast to continue outperforming other developed and emerging markets over a 10-year window, driven by a persistent U.S. demographic advantage contrasted against China's aging population, which is described as worse than Japan's 1990 demographics.
- The firm advises clients to maintain investment positions and avoid reacting to market volatility, predicting that staying invested despite recent drops will yield positive outcomes.
- Future relations between the U.S. and China are expected to be a primary focus for the coming decade, characterized by fluctuations and significant geopolitical, military, and economic implications.
- The primary risk to American preeminence is identified as external, specifically stemming from China's self-perception and potential overconfidence by Chinese leaders which could lead to accidents, rather than from internal U.S. events.
- Current involvement in NATO expenses is projected to be near a low point, while the finance sector is expected to remain dynamic with continuous new developments requiring evaluation.
- Geopolitical situations involving Iran are anticipated to remain uncertain and challenging for clients in the near term, while historical precedents from the Reagan administration regarding Federal Reserve policy are viewed as relevant guides for current actions.
- Any factor that diminishes U.S. preeminence is predicted to have severe negative consequences for the global economy.