Investing
Did Bill Gross Contribute to (or Write) the Goldman Sachs Top 2015 Predictions?
Published:
Last Updated:
Goldman Sachs Group Inc. (NYSE: GS) may be in the hot seat over its commodities business right now, among other issues from time to time, but the firm is still one of the most revered financial powerhouses in the world. It is even a Dow Jones Industrial Average component. Now we have a list of the firm’s top predictions for 2015. What stood out after digesting the comments in the past day or so is that they echo many of the thoughts that Bill Gross wrote about in his first investment outlook after he joined Janus.
The most important theme that Goldman Sachs was forecasting, at least by our take, is similar to what Bill Gross has warned about previously, and not just in his first Janus investment outlook commentary: investors and savers are going to have to learn to live in a low-return world. Should that say “keep living in a low-return world”?
Goldman Sachs now sees the S&P 500 Index hitting 2,100 by the end of 2015. In short, it expects roughly 5% stock gains for the year. The one thing worth noting is that the current level is right at 2,050. After a bull market that is nearing six years and that has risen more than 200% from the selling climax low of 666, is that enough reward to stay heavily invested in stocks? Now keep in mind that Goldman Sachs noted that the S&P is trading at the high-end of a fair value range based on metrics like price-to-earnings and price-to-book ratios.
ALSO READ: The 10 Safest High-Yield Dividends
Low Volatility
Volatility is expected to remain low. Maybe the upside of 2,100 for the S&P 500 doesn’t sound great, but that means that sell-offs should be bought rather than sold. If you get another September/October stock market sell-off, let’s just say that you know by now what to do!
Rising Interest Rates
The Fed is expected to raise interest rates relatively later than sooner, perhaps by September of 2015. Still, Goldman expects the Fed to hike rates faster than the markets are expecting. The firm sees the 10-year Treasury yield rising from roughly 2.30% to or above 3.0% by mid-2015.
Improving European Stocks
Goldman Sachs does not believe the expected strength coming in 2015 is reflected in the market yet. The firm noted the potential effects of a European Central Bank round of quantitative easing.
ALSO READ: 7 Analyst Stock Picks Under $10 With Massive Upside Calls
Other Goldman Sachs Top Themes for 2015
This time without any Bill Gross references:
ALSO READ: Analyst Sees Post-Merger Halliburton Worth Less Than Before
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.