Just a reminder that GS are the same that said the s+p500 would barely return 6% with dividends included this year. We are currently up nearly 30% YTD so they were miles out as they are most years.
@@BaileyMxX Yep, these investment banks would never release their actual sentiment or the forecast on the market's future, they'll release what they want the rest of us to believe.
I'm not saying that they are/will be right but there are many reasons why your argument is flawed. 1. Because of mean reversion in equity markets, there is less variation in ten-year returns than one-year returns so it's not right to evaluate their predictive power based on their one-year predictions. One-year returns predictions is a different ball-game altogether. 2. All predictions come with a margin of error. To mount a valid case against their prediction, you would need to employ the statistical method of hypothesis testing to demonstrate that, given a level of significance, their prediction is inaccurate. 3. Even if we manage to prove beyond reasonable doubt that their previous predictions were systematically inaccurate, there is a good chance that they have updated their model for this new data and hence we don't have much data on the updated model.
No real reason whatsoever. The only thing I would say is VHVG is almost 16 times the size of LGGG, if that’s a factor worth considering. VHVG does have nearly twice the number of holdings. You do save £300 on a £100k portfolio with LGGG, a problem I would like to have one day!
Your perspective is very reasonable, and it's not the first or second time you've mentioned the 10-year low returns. The issue here is the current period of irrational exuberance. One wants to do the prudent thing, but the markets are erratic and unpredictable. I know I should drip feed, but I can't cope with how wrong I was when I decided to wait. Even at the 3600 pullback, I chose to wait because it didn't seem wise to invest then due to P/E ratios being higher than average. I'm so against investing now that I think it might be a sign to everyone that perhaps right now is actually a good moment to do so. Haha! Thanks for the video Ramin :)
I have one fund portfolio myself.. made up of the Vanguard US Total Markets Index fund. I still have more than 3 decades left in my investment horizon, so not going to change anything based on this projection.
If you have a long way (15+ years) to retirement then that should work out great. Just automate it to dollar-cost-average in every pay cheque for the next few decades and try to forget about it until you are like 60 - over the long run that fund should work out just fine. There will be corrections, crashes, and media hysteria along the way but on long timescales a developed world accumulation fund will suit your needs - just set it up and let it run for a few decades
But it's a pretty concentrated reduction, might say more about how he feels about Apple than anything else. The US election gave a risk of tax on unrealized gains on the one hand, and high tariffs on the goods Apple imports from China on the other.
Maybe GS want the fear factor to set in, so there's a sell-off of US stocks - meaning cheaper stocks for them to buy back. Perhaps they do the opposite of what retail investers do? Perhaps that's what we should do.
Where do market timers like me stand, I have 300k in money market funds with Fidelity and scared to invest in anything, stocks and gold are volatile alike and bonds are a no go area for me? What is the best course of action?
When you are ready, take your time and average in across a year or more. Almost nobody can time a bottom precisely. One of my favorite adages is: "Prices that you never thought possible - actually ARE!" I have experienced this in my own investing. Sometimes a handful of shares at the very, very, bottom made up for many poor purchases at higher prices.
From about 1999 up until 2009, US treasury bonds did a lot better than the US stock market. Much better than S&P 500 index, or total US stock market index
@theowenssailingdiary5239 Exactly, bond prices were very low and yields high. And bond prices are low now and yields up, so returns on bonds may well be good going forward. And of course it could be good to have a bit of dry powder, keep some bonds in your portfolio just in case. I do realise nobody can reliably predict the future, not even over payed fund mangers or even Mr Buffet
@@fredatlas4396but there’s more debt now, with worse debt to gdp ratios. Inflation will eat bonds, especially if there is another supply crunch, from say a China blockade of Japan.
@@theowenssailingdiary5239Think 1929-1939 was worse. Probably worse in the 1970s too. There have been many 5-10 year periods where bonds have outperformed equities in the past. It wasn’t a one off thing in 2000-2009.
Your videos have been truly impressive! As one of your regular viewers, I've been following your content closely for a while now. I'm very interested in making an investment, but I’m still having trouble identifying the right opportunity to fully commit to. I would greatly appreciate any guidance or suggestions you might have in this area.
Julien Bridgen shown a chart recently bonds total returns vs gold... gold outperformed yoy past decade. a decline in dollar and rotation to ex us assets would make sense... anything but bonds!
It's prediction. Nobody knows the future. They are betting on the odd of stock won't keep going up. Warren buffett and many big funds are selling stocks like crazy and sitting on tons of cash.
Fascinating video. I've moved from 100% shares to 50%, with the balance into mostly bonds and some gold - largely in expectation of a stock-market crash. Warren Buffett would approve, I think.
Thanks Ramin. A really informative video as usual. Just wondering if something like VEU - Vanguard FTSE All-World ex-US ETF is a solution to dilute the US equity exposure, especially the MAG7. However, it's not available on HL. I suspect I'll remain fully invested globally but would be interesting to hear about alternative ETF's to dilute US/MAG7.
I'm very big on £ATT and £SMT and £SMGB, in part as I can't buy individual holdings (wife works in private equity, so restricted) and I'm somewhat limited on T212 to their options. Eventually I want to have £100K of my own money in each, currently at £67K, £44K and £29K, respectively. I will just trust the process, that tech is going to perform strongly over the 20 year time horizon I have, and ignore the crystal balling of the day, especially from a bank that predicted only modest upside this year, and are wrong at least as often as they are right. I will keep holding, and funnel more money into them as opportunities allow. Any dip is good news for me, long term.
Long dated Gilts can be had for 4.7% at the moment. If inflation stays below the BoE target of 2% that will give you a real return of 2.7% in the long term if the BoE does its job. In a recession stock prices go down but bond prices go up as BoE tries to reflate the economy by lowering interest rates. As we come out of a recession, you sell the bonds at a profit (which is not taxed because Gilts are excempt from CGT) and buy stocks at a lower price than they are now.
And by the way, the only risk is that Britain loses control of inflation which would be good for stocks and bad for long dated Gilts prices in the short term but the resulting high interest rates would kill the economy and we would get a recession. Then we are in the scenario outlined above playing out. Disclosure: I'm retired so 4.7% income from my Capital for rest of my life is more than enough for me.
First time hearing such a low prediction for the stock market. I think it will be the opposite. The next decade will be the highest performace stock market ever due to currency debasement. The SP500 is highly correlated to m2 supply. The M2 supply will increase at ever increasing rates due to the mathematics of debt. The SP500 doesnt actually go up in value. Its the currency you are measuring it in that goes down.
Thanks for this, it was very interesting. My knowledge of these matters isn't great but I'd have thought last week's election result would also be a big influence, e.g. it will be a pro big tech government.
Simply it’s “Forecast” it’s like open disclaimer right on your face. After every year forecast they will say “ ooops we got it wrong this year…” same story every year 😂😂
Recently bought back into Upstart Holdings (UPST) and Microstrategy (MSTR) prior to the results to take advantage of Lower interest rates and BTC bullishness. It worked. Post election bought Dutch Bros (BROS) to take advantage of good results and bold expansion plans. We shall see. small and micro caps may do very well thanks to tarriffs and Small Cap 600 is a solid choice. I may investigate further and buy next week. Another great video Ramin, regards.
@@MrFrobbo I had over 100K in there at one point and made about 60K. I now only have 15K in MSTR, always wary of BTC volatility. If i was brave i'd just put 100K in and leave it.
@@robertdewar1752 Nothing wrong with taking profits. 15K in microstrategy will still make you a millionaire in the next 20 years. The only two stocks I care about are MSTR and Tesla. I buy other stuff for fun but no point in buying worse assets. Im expecting Bitcoin to hit $10,000,000 in the next 10 years. Thats a 130x. MSTR will probably double BTC so thats a 260x in 10 years. Your 15K will be worth almost $4,000,000. Say I am 75% wrong then you still earn $1,000,000 within 10 years. Then what happens if MSTR starts to get priced like a tech stock massively higher than its asset value. This could be one of the greatest investments of our lifetime.
@robertdewar1752 go research YT for MSTR vids, see how Saylor is shorting the $ in the 'Infinate money glitch' and is about to buy $42b of BTC. His latest (2024) Q3 ATM video is THE one. Keep holding, buy more!
It has taken NVIDIA 25 yrs from I.P.O to the world’s biggest valued company. These timelines are getting shorter & shorter over the decades. Within 10 yrs at least 3 companies will be as big as the 7. These vast timeline transformations can not be calculated by Goldman or even Buffet. I have no idea what % the U.S mkt will change over 20 yrs. but am extremely confident that at least 100 companies will join the s & p 500 from new & fast developing start ups. I have been sceptical of some of ARK investments, but Cathy Wood has the right idea about fundamental transformations in many industries, a 10 year horizon is now almost impossible to calculate due to these changes and I believe old models are redundant
@@robertdewar1752 BELIEF is a dangerous thing. “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” ― Mark Twain
While an energy revolution has already started; it may take more than a decade for it to move the market higher, especially if it has to loft it from the bottom.
US is deffo over priced , always was always will be as long as the world uses the us dollar. Got nothing to do with how good the companies are but everything to do with them being able to print the worlds currency and pay workers high wages that they then invest into the sp500 for their pension. Once that changes all bets are off.
US candidate policies were both viewed as inflationary with little regard for fiscal moderation; trump’s even moreso. So markets are viewing a no or soft landing scenario and an un-inverted yield curve where historically long-dated UST spreads vs Fed terminal rate of ~170bps - ie. roughly where it is now. Until/unless the wheels fall off..
The bond market is losing confidence that Powell knows what he is doing, and also pricing in risk as he tussles with Trump over policy. Personally, I have held my bond funds. I bought at these levels back in the spring/summer. Yeah I missed paper profits by not unloading back in August, but I figure if prices were good enough then, they're good enough now.
Bit unkind to the Fed who have a limited remit and tools, and are mostly reactionary to backwards-looking data and govt stimulatory policies which they have no control over. Recommend listening to a recent Odd Lots podcast (Nov 14) where they spoke to an ex-Fed official Richard Clarida for an insiders view of the current dynamic.
We are living in a world where technology advancement is accelerating. What happens in the next 10 years compared to the last 10 years is impossibly to predict. However with AI, I wouldn't be surprised if it unlocks so much more efficiencies that the market, especially the US market, will march on upwards. I have no intentions of moving away from the US or equities in any regard. Buy baby buy as Trump may say.
People need to look at the data, for very very long periods of time bonds out performed stocks from 1970. It’s a pretty recent phenomenon where stocks went nuclear
GS are correct. The Mag 7 have generated big sales from the rise of online after the pandemic and a delusional AI bubble which will not deliver ROI. Hence they will not sustain their sales over the next ten years.
Government bonds? The US government is in trillions of debt and soon won't be able to make it's interest payments... No way you want to be buying government bonds and lending the government money... with a stroke of the pen they can pass a law to wipe out their debt obligations leaving you holding an empty bag and out of all your money.
They would never be able to borrow again if they default on bonds. No, what would happen is they would do what other countries had done in the past and money printer go burrrr literally print money to pay off bond holders not waiting for maturity just pay them all off and be done with the debt. Sort of like QE has done anyway with the Fed Reserve expanding its balance sheet over 7 trillion much of that are treasuries as well as junk bank loans CDO mortgage back garbage hence why banks keep pumping real-estate prices and why we've had an explosion in inflation money printing going burrr. But yes, any country could just print the money to pay bond holders. Typically this results in massive hyperinflation and complete collapse in the value of the currency. Argentina, Turkey, Zimbabwe, Germany's Weimar Republic that resulted in, well we know what they resulted in, etc.
They are trying to gaslight retail investors into dumping stocks for Bonds? so they can benefit from any depression in stock prices and appreciation of Bond values that results
These forecasts were done before the US election though, and GS and Vanguard have got forecasts badly wrong before. If you’d listened to GS and moved out of US stocks when they were predicting the S&P would do badly this year you’d have missed out on big gains. I’m about 70% exposed to the US by virtue of the global index trackers and tech fund that the vast majority of our ISAs are in, and I’m not really tempted to change anything. I could shift a bit into US small caps but to make a really noticeable difference it would have to be a large amount so no. That Ishares etf that Ramin is in is good, although I note it’s pretty small compared to its sibling the GBP denominated ISP6…liquidity could be a concern?
USML (Invesco, USD) has a TER of 0.14%, where IDP6 (iShares, GBP) has a TER of 0.30%, however i would imagine the GBP-USD conversion fee wipes out the lower TER savings (I haven't run the numbers). As you say the USML fund has a very low fund size, and yes liquidity may be a concern here. Personally, i would buy the IDP6 denominated in GBP to take advantage of potentially lower spread and zero conversion fees. There's better ways to hedge currency.
@ Yes, I believe he’s in VHVG as his core fund…but in this vid he says he’s in Ishares S&P600 fund (USML) which is top of the list of US Small Co. funds he showed (unless I misunderstood him)
@@mikew5274 Could be. He appears to have moved around with his investments over the yrs of doing these videos. He had some bond index funds at one point. He's changed his strategies as he goes along. I guess he's realising that a buy and hold strategy is best long term. John Bogle said don't try and time the markets, don't look for the needle just buy the whole haystack
People are not taking into account geopolitical and environmental issues plus the immense debt we have. Furthermore they are not considering the social problems we have and the actions of politicians. In my opinion, we will have so instability and we run the risk of a sudden huge crisis which mankind will not be able to solve.
Investing in stocks may appear simple, but selecting the appropriate stock without a proven strategy can be tough. I've been trying to develop my $210,000 portfolio for a while, but the biggest hurdle is a lack of a clear entrance and exit strategy. Any feedback on this topic would be greatly welcomed.
My concern with small caps is the efficent innovative companies are gobbled up by the large cap and leave the ETF index. There's no compelling reason why the remaining small cap companies should outperform large cap esp when you consider small companies use services and infrastructure provided by companies like Amazon. Also, S&P 500 companies employ a large number of staff. CEOs will quietly cut staff and sell busines unit to keep their shares high for the medium term.
The GS and Vanguard analyses will be music to the ears of Value Stock Geek and his Weird Portfolio then? I'm just left wondering what report would leave the investment community believing there is bad news ahead for a market weighted S&P 500 over the next 10 years...
Great video. I reckon we might be OK for a while yet, with Trump election initially giving a bounce before who knows what? I think its best to wait and watch for the next few months. Great insight though and will definitely keep the small caps play front of mind.
I don't see any sense in investing in bond funds at the present time, not when T-bills are offering such favorable interest rates. I'd suggest that bank savings rates of 5% should also be considered as an investment option.
With markets experiencing significant volatility, inflation on the rise, and the Federal Reserve implementing substantial interest rate hikes, treasury yields are climbing rapidly. This has resulted to lot of losses for portfolios this quarter. I'm currently at a crossroads, considering whether to liquidate my $125k bond and stock portfolio. In this market conditions, I’m seeking guidance on how to navigate this uncertainty and potentially capitalize on the situation.
I agree, just because the market presents opportunities doesn't mean we should rush in headfirst. For this reason, we should look for appropriate market analysis or guidance or, alternatively, seek advice from certified market strategists.
I don’t get it one day you say don’t time the market then another you say divest… index fund all the way.. investing is boring by default for those who can’t afford losing it
Vanguard put 7% as the target, with an IQR from 3-11%. The actual figure was 13%. When you consider the PE went from 20 to 30, the PB went from 2.7 to 5.3, and the Shiller CAPE went from 26 to 38, they were actually bang on.
Simply it’s “Forecast” it’s like open disclaimer right on your face. After every year forecast they will say “ ooops we got it wrong this year…” same story every year 😂😂
AI stocks are poised to dominate in 2024. I prefer NVIDIA because they are well-positioned to sustain long-term growth and serve as a foundational platform for other AI companies. I know an investor who has achieved over 200% returns with NVIDIA. I'm also open to any additional recommendations you may have.
I believe the next significant opportunity lies in AI. For sustained growth similar to META, it is essential to avoid impulsive decisions influenced by short-term market fluctuations. Emphasizing patience and a long-term perspective is crucial, and seeking financial advisory services can facilitate informed buying and selling decisions.
Warren Buffett once said to treat investing in securities like real estate-you don't constantly check for gains. So, the recent bitcoin price drop doesn't bother me. I keep dollar-cost averaging and adding to my position, and I'm up 200% year-to-date because of this strategy.
Regretting missing out on earlier Bitcoin investments, I kept funds in a HYSA. Now, with $200k to invest, I aim to avoid FOMO and buying at the peak. What's the best approach for a newbie to navigate the market?
You d'man Ramin. Considered analysis of the data from Goldman. I'm leaning the same way - definitely open to a future rebalance and I'm also pretty optimistic that we will see a rise in small caps IF the new administration creates an environment for business growth and manufacturing returns at strength within the US. Talk of potential USA manufacturing partnering with Mexico is a tantalising prospect...but a road beset with significant hurdles. Hopefully proposed tarifs are applied sensibly.
It is easy to know, the world is changing and is doing fast, we may call recession on Spring because inflation was going high quick, its all about growth and contraction and now is contracting as we see corporations firing people everyday.
It's too early to get into bonds. My guess is that Goldman over invested in bonds because they thought the market was going to go down this year. They may have particularly over invested in corporate bonds. They are trying to dump them now by generating demand for them. My recommendation is to wait for Trump to do something that causes investors to further get out of bonds and put their money into stocks.... which I believe will happen. Probably another round of corporate tax breaks. At that time the price of bonds will be beaten down and they will be a bargain... that's when you invest in them and ride them till the next stock crash then sell and buy stocks. Rinse and repeat. To summarize a quote from Buffet: 'When people are greedy that's when to be fearful.... when people are fearful that's when to be greedy'.
Nope. Super accelerated computing makes every business faster, more effective, efficient and less costly. Everyone uses technology in peace snd war . Stick to high ROIC , low debt , high margin companies. They won’t disappear. Second: too much vested interest in the markets rising .
If you look at the wackos that Trump is putting in his administration, and his desire to "fight" the Fed, I'm getting into bonds for the foreseeable future.
The only thing of significance Goldman Sachs have contributed to the economy in the last ~25 years is the 2008 GFC. They're literally trying to predict the future, yet people take them seriously. The only thing we know for sure is that they will be wrong, but we don't by how much, because the stockmarket is unpredictable. The concentration of market capital in a relatively few (tech) companies does indeed means the S&P500 no longer reflects the wider economy and is overly leveraged in this area. As for investing in VALUE instead of GROWTH and diversifying your investments by (Geographical) region, this has been the advice for several years now, so GS aren't saying anything new.
Just a reminder that GS are the same that said the s+p500 would barely return 6% with dividends included this year. We are currently up nearly 30% YTD so they were miles out as they are most years.
Just because they were wrong this past year means nothing - they are talking about the next decade.
@@chrisj8764 They were wrong just about every single year forecast hmmmmmmm......
@chrisj8764 now look at how off they were for the past decades outlook 😉 they were miles off on that too.
@@BaileyMxX Yep, these investment banks would never release their actual sentiment or the forecast on the market's future, they'll release what they want the rest of us to believe.
I'm not saying that they are/will be right but there are many reasons why your argument is flawed.
1. Because of mean reversion in equity markets, there is less variation in ten-year returns than one-year returns so it's not right to evaluate their predictive power based on their one-year predictions. One-year returns predictions is a different ball-game altogether.
2. All predictions come with a margin of error. To mount a valid case against their prediction, you would need to employ the statistical method of hypothesis testing to demonstrate that, given a level of significance, their prediction is inaccurate.
3. Even if we manage to prove beyond reasonable doubt that their previous predictions were systematically inaccurate, there is a good chance that they have updated their model for this new data and hence we don't have much data on the updated model.
Global index ‘til I die. I have no clever analysis but I think there’s something in not over thinking it and not playing around with your portfolio.
What percentage of your portfolio is the global index?
@@AlexisMoore-nx6wf The same can be said about Bitcoin
It used be made up of loads of different funds but I’ve since consolidated it to VHVG and VFEG.
Why don't use a cheaper and a better performing global etf like LGGG?
No real reason whatsoever. The only thing I would say is VHVG is almost 16 times the size of LGGG, if that’s a factor worth considering. VHVG does have nearly twice the number of holdings. You do save £300 on a £100k portfolio with LGGG, a problem I would like to have one day!
What was Goldman, Vanguard and others forecast in 2000, 2005, 2010? A comparison against actual returns would be helpful.
Good idea
Also, 2015 but maybe not 2020 because of Covid-19.
Said we'd be up 6% this year with dividends included. Yet here we are nearly 30%.... Can't imagine their long-term forecasts fare much better tbh
GS predictions are a joke.
I remember Vanguard making similar predictions in the past which turned out to be totally wrong.
Vanguard, who decided not to offer their clients the Bitcoin ETF, great decision that! 😂
Your perspective is very reasonable, and it's not the first or second time you've mentioned the 10-year low returns. The issue here is the current period of irrational exuberance.
One wants to do the prudent thing, but the markets are erratic and unpredictable. I know I should drip feed, but I can't cope with how wrong I was when I decided to wait.
Even at the 3600 pullback, I chose to wait because it didn't seem wise to invest then due to P/E ratios being higher than average.
I'm so against investing now that I think it might be a sign to everyone that perhaps right now is actually a good moment to do so. Haha!
Thanks for the video Ramin :)
Not sure I trust bonds with governments carrying record levels of debt. Just need to be more selective in stocks.
I have one fund portfolio myself.. made up of the Vanguard US Total Markets Index fund. I still have more than 3 decades left in my investment horizon, so not going to change anything based on this projection.
Just got into investing 3 months ago I went with the ftse developed world accumulating, hopefully it works out
Going 'Acc' is a smart move when starting investing.
And relax if it corrects. Think of it as a ‘sale’ in the long term.
If you have a long way (15+ years) to retirement then that should work out great. Just automate it to dollar-cost-average in every pay cheque for the next few decades and try to forget about it until you are like 60 - over the long run that fund should work out just fine. There will be corrections, crashes, and media hysteria along the way but on long timescales a developed world accumulation fund will suit your needs - just set it up and let it run for a few decades
The answer is always diversify. Otherwise the bubbles suck you in.
Buffet seems to think like Goldman Sachs - considering he is reducing BRK's position in US Equities in favor for T-Bills.
But it's a pretty concentrated reduction, might say more about how he feels about Apple than anything else. The US election gave a risk of tax on unrealized gains on the one hand, and high tariffs on the goods Apple imports from China on the other.
Probably thinks a big war is coming if that is the case.
Maybe GS want the fear factor to set in, so there's a sell-off of US stocks - meaning cheaper stocks for them to buy back. Perhaps they do the opposite of what retail investers do? Perhaps that's what we should do.
Where do market timers like me stand, I have 300k in money market funds with Fidelity and scared to invest in anything, stocks and gold are volatile alike and bonds are a no go area for me? What is the best course of action?
Wait until after all the polls are closed, do not make any moves yet. Nobody knows where this rollercoaster of markets is up next.
When you are ready, take your time and average in across a year or more. Almost nobody can time a bottom precisely. One of my favorite adages is: "Prices that you never thought possible - actually ARE!" I have experienced this in my own investing. Sometimes a handful of shares at the very, very, bottom made up for many poor purchases at higher prices.
From about 1999 up until 2009, US treasury bonds did a lot better than the US stock market. Much better than S&P 500 index, or total US stock market index
You've picked the worst ten years for stocks on record. Nobody can forsee this.
@theowenssailingdiary5239 Exactly, bond prices were very low and yields high. And bond prices are low now and yields up, so returns on bonds may well be good going forward. And of course it could be good to have a bit of dry powder, keep some bonds in your portfolio just in case. I do realise nobody can reliably predict the future, not even over payed fund mangers or even Mr Buffet
@@fredatlas4396fair points
@@fredatlas4396but there’s more debt now, with worse debt to gdp ratios. Inflation will eat bonds, especially if there is another supply crunch, from say a China blockade of Japan.
@@theowenssailingdiary5239Think 1929-1939 was worse. Probably worse in the 1970s too.
There have been many 5-10 year periods where bonds have outperformed equities in the past. It wasn’t a one off thing in 2000-2009.
Very nice analysis.
That is nice.
Thank you
Wow!
Your videos have been truly impressive! As one of your regular viewers, I've been following your content closely for a while now. I'm very interested in making an investment, but I’m still having trouble identifying the right opportunity to fully commit to. I would greatly appreciate any guidance or suggestions you might have in this area.
Thank You.
You're welcome @DPTrainor1
Didnt Goldman say 2024 would be a poor year for US stocks? Never listen to them.
Morgan Stanley are no better than pin a tail on a donkey either
Well, maybe they cant predict the future, who knows...
Julien Bridgen shown a chart recently bonds total returns vs gold... gold outperformed yoy past decade. a decline in dollar and rotation to ex us assets would make sense... anything but bonds!
It's prediction. Nobody knows the future. They are betting on the odd of stock won't keep going up. Warren buffett and many big funds are selling stocks like crazy and sitting on tons of cash.
The year isn’t over
Could be worse. UK's FTSE Small Cap index was getting on for 10% higher than it is today about 3 years ago.
Fascinating video. I've moved from 100% shares to 50%, with the balance into mostly bonds and some gold - largely in expectation of a stock-market crash. Warren Buffett would approve, I think.
Good luck with bonds. I wish you all the best.
They're going to need it
Thanks!
Thanks Ramin. A really informative video as usual. Just wondering if something like VEU - Vanguard FTSE All-World ex-US ETF is a solution to dilute the US equity exposure, especially the MAG7. However, it's not available on HL. I suspect I'll remain fully invested globally but would be interesting to hear about alternative ETF's to dilute US/MAG7.
Very nice analysis. Certainly, food for thought. With my thanks.
Very welcome@dennismorris7573
I'm very big on £ATT and £SMT and £SMGB, in part as I can't buy individual holdings (wife works in private equity, so restricted) and I'm somewhat limited on T212 to their options. Eventually I want to have £100K of my own money in each, currently at £67K, £44K and £29K, respectively.
I will just trust the process, that tech is going to perform strongly over the 20 year time horizon I have, and ignore the crystal balling of the day, especially from a bank that predicted only modest upside this year, and are wrong at least as often as they are right.
I will keep holding, and funnel more money into them as opportunities allow. Any dip is good news for me, long term.
Long dated Gilts can be had for 4.7% at the moment. If inflation stays below the BoE target of 2% that will give you a real return of 2.7% in the long term if the BoE does its job. In a recession stock prices go down but bond prices go up as BoE tries to reflate the economy by lowering interest rates. As we come out of a recession, you sell the bonds at a profit (which is not taxed because Gilts are excempt from CGT) and buy stocks at a lower price than they are now.
And by the way, the only risk is that Britain loses control of inflation which would be good for stocks and bad for long dated Gilts prices in the short term but the resulting high interest rates would kill the economy and we would get a recession. Then we are in the scenario outlined above playing out. Disclosure: I'm retired so 4.7% income from my Capital for rest of my life is more than enough for me.
Long duration bonds have little to no chance of outperforming stocks.
First time hearing such a low prediction for the stock market. I think it will be the opposite. The next decade will be the highest performace stock market ever due to currency debasement. The SP500 is highly correlated to m2 supply. The M2 supply will increase at ever increasing rates due to the mathematics of debt. The SP500 doesnt actually go up in value. Its the currency you are measuring it in that goes down.
All of these guys are correct. We are ALL Michael Burry in this era. We already know its coming. But, for now, make as much as you can.
Fantastic
With companies like palantier I think things will be fine.
Thanks for this, it was very interesting. My knowledge of these matters isn't great but I'd have thought last week's election result would also be a big influence, e.g. it will be a pro big tech government.
Thank you I am glad it was helpful @davidcollier6520
Simply it’s “Forecast” it’s like open disclaimer right on your face. After every year forecast they will say “ ooops we got it wrong this year…” same story every year 😂😂
Recently bought back into Upstart Holdings (UPST) and Microstrategy (MSTR) prior to the results to take advantage of Lower interest rates and BTC bullishness. It worked. Post election bought Dutch Bros (BROS) to take advantage of good results and bold expansion plans. We shall see. small and micro caps may do very well thanks to tarriffs and Small Cap 600 is a solid choice. I may investigate further and buy next week. Another great video Ramin, regards.
MSTR all the way!
@@MrFrobbo I had over 100K in there at one point and made about 60K. I now only have 15K in MSTR, always wary of BTC volatility. If i was brave i'd just put 100K in and leave it.
@@robertdewar1752 Nothing wrong with taking profits. 15K in microstrategy will still make you a millionaire in the next 20 years. The only two stocks I care about are MSTR and Tesla. I buy other stuff for fun but no point in buying worse assets. Im expecting Bitcoin to hit $10,000,000 in the next 10 years. Thats a 130x. MSTR will probably double BTC so thats a 260x in 10 years. Your 15K will be worth almost $4,000,000. Say I am 75% wrong then you still earn $1,000,000 within 10 years. Then what happens if MSTR starts to get priced like a tech stock massively higher than its asset value. This could be one of the greatest investments of our lifetime.
@robertdewar1752 go research YT for MSTR vids, see how Saylor is shorting the $ in the 'Infinate money glitch' and is about to buy $42b of BTC. His latest (2024) Q3 ATM video is THE one. Keep holding, buy more!
@@robertdewar1752 my replies are being deleted 🤣
One of the best financial UA-cam channels, lacks the Lambo and private jet though 😂
Glad you think so @ianboyd9723
It has taken NVIDIA 25 yrs from I.P.O to the world’s biggest valued company. These timelines are getting shorter & shorter over the decades. Within 10 yrs at least 3 companies will be as big as the 7. These vast timeline transformations can not be calculated by Goldman or even Buffet. I have no idea what % the U.S mkt will change over 20 yrs. but am extremely confident that at least 100 companies will join the s & p 500 from new & fast developing start ups. I have been sceptical of some of ARK investments, but Cathy Wood has the right idea about fundamental transformations in many industries, a 10 year horizon is now almost impossible to calculate due to these changes and I believe old models are redundant
I believe this is an accurate description of what is happening.
@@robertdewar1752 BELIEF is a dangerous thing.
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”
― Mark Twain
Indices that are weighted by market capitalization are inherently momentum-based
While an energy revolution has already started; it may take more than a decade for it to move the market higher, especially if it has to loft it from the bottom.
In 1982 they predicted oil at 250. Still waiting...
Where can we get the Goldman report?
3 or6% seems INSANE comparing to LAST 100 years, 13% SPN500 AND 18.25% NASDAQ!
Investing in stocks is planting a tree for your future; with patience, it will bear fruit.
Just like a tree, investments need time and care to reach their full potential.
US is deffo over priced , always was always will be as long as the world uses the us dollar.
Got nothing to do with how good the companies are but everything to do with them being able to print the worlds currency and pay workers high wages that they then invest into the sp500 for their pension.
Once that changes all bets are off.
@@FlyingFun. it’s not about value investing right now if you’re after the short buck in my opinion
You did not mention the range! There are many details in the report.
I need a little help understanding why, if the Fed cut 50 bps and an additional 25 bps this past week, why did UST yields go higher?
Because the markets saw the Fed's cut as driven by politics, perhaps?
US candidate policies were both viewed as inflationary with little regard for fiscal moderation; trump’s even moreso. So markets are viewing a no or soft landing scenario and an un-inverted yield curve where historically long-dated UST spreads vs Fed terminal rate of ~170bps - ie. roughly where it is now. Until/unless the wheels fall off..
The bond market is losing confidence that Powell knows what he is doing, and also pricing in risk as he tussles with Trump over policy. Personally, I have held my bond funds. I bought at these levels back in the spring/summer. Yeah I missed paper profits by not unloading back in August, but I figure if prices were good enough then, they're good enough now.
@@OnceUponATimeInJapanM8 I'm not seeing where the 170bps number is coming from (?) Fed funds are 4.58 and the 30-yr is 4.60, what spread do you mean?
Bit unkind to the Fed who have a limited remit and tools, and are mostly reactionary to backwards-looking data and govt stimulatory policies which they have no control over.
Recommend listening to a recent Odd Lots podcast (Nov 14) where they spoke to an ex-Fed official Richard Clarida for an insiders view of the current dynamic.
We are living in a world where technology advancement is accelerating. What happens in the next 10 years compared to the last 10 years is impossibly to predict. However with AI, I wouldn't be surprised if it unlocks so much more efficiencies that the market, especially the US market, will march on upwards. I have no intentions of moving away from the US or equities in any regard. Buy baby buy as Trump may say.
That's what Jim Cramer says and he is often famously wrong.
Why is simplicity important in your stock allocation?
Concentration mirrors the personal wealth concentration, it seems.
The only forecast that will probably jevtrue is that GS will make a lot of money
People need to look at the data, for very very long periods of time bonds out performed stocks from 1970. It’s a pretty recent phenomenon where stocks went nuclear
GS are correct. The Mag 7 have generated big sales from the rise of online after the pandemic and a delusional AI bubble which will not deliver ROI. Hence they will not sustain their sales over the next ten years.
I’ve only got 45% in the US 🇺🇸 😂
The Buffet indicator has the stock market at 206% above fair market value.
Similar analysis by John Hussman, based on the high valuations.
recession that never comes and the market only goes up.
Government bonds?
The US government is in trillions of debt and soon won't be able to make it's interest payments...
No way you want to be buying government bonds and lending the government money... with a stroke of the pen they can pass a law to wipe out their debt obligations leaving you holding an empty bag and out of all your money.
They would never be able to borrow again if they default on bonds. No, what would happen is they would do what other countries had done in the past and money printer go burrrr literally print money to pay off bond holders not waiting for maturity just pay them all off and be done with the debt. Sort of like QE has done anyway with the Fed Reserve expanding its balance sheet over 7 trillion much of that are treasuries as well as junk bank loans CDO mortgage back garbage hence why banks keep pumping real-estate prices and why we've had an explosion in inflation money printing going burrr.
But yes, any country could just print the money to pay bond holders. Typically this results in massive hyperinflation and complete collapse in the value of the currency. Argentina, Turkey, Zimbabwe, Germany's Weimar Republic that resulted in, well we know what they resulted in, etc.
Personally, I'm out of the market because base rates are higher than dividend yields.
Simples 😊
Big daddy’s say this. Red flags for me. For the timing being not now. It’s a bullish time to play in the markets.
Interesting
Thank you @aquahero
They are trying to gaslight retail investors into dumping stocks for Bonds? so they can benefit from any depression in stock prices and appreciation of Bond values that results
What? Nonsense - see me comment.
no, it's because index will fall for -50% next 2 years, and then it will gain standard 10-11% per year
@@alekseygerbyn69tell me you missed this bull run without telling me
These forecasts were done before the US election though, and GS and Vanguard have got forecasts badly wrong before. If you’d listened to GS and moved out of US stocks when they were predicting the S&P would do badly this year you’d have missed out on big gains.
I’m about 70% exposed to the US by virtue of the global index trackers and tech fund that the vast majority of our ISAs are in, and I’m not really tempted to change anything. I could shift a bit into US small caps but to make a really noticeable difference it would have to be a large amount so no. That Ishares etf that Ramin is in is good, although I note it’s pretty small compared to its sibling the GBP denominated ISP6…liquidity could be a concern?
USML (Invesco, USD) has a TER of 0.14%, where IDP6 (iShares, GBP) has a TER of 0.30%, however i would imagine the GBP-USD conversion fee wipes out the lower TER savings (I haven't run the numbers). As you say the USML fund has a very low fund size, and yes liquidity may be a concern here. Personally, i would buy the IDP6 denominated in GBP to take advantage of potentially lower spread and zero conversion fees. There's better ways to hedge currency.
I thought Ramin was in Vanguard ftse dev world Acc etf
@@fredatlas4396 What about it?
@ Yes, I believe he’s in VHVG as his core fund…but in this vid he says he’s in Ishares S&P600 fund (USML) which is top of the list of US Small Co. funds he showed (unless I misunderstood him)
@@mikew5274 Could be. He appears to have moved around with his investments over the yrs of doing these videos. He had some bond index funds at one point. He's changed his strategies as he goes along. I guess he's realising that a buy and hold strategy is best long term. John Bogle said don't try and time the markets, don't look for the needle just buy the whole haystack
People are not taking into account geopolitical and environmental issues plus the immense debt we have. Furthermore they are not considering the social problems we have and the actions of politicians. In my opinion, we will have so instability and we run the risk of a sudden huge crisis which mankind will not be able to solve.
Regression to mean.
Do they mean 3% per year over ten years.
Only 3% gain over 10 years would make stocks a non-investment.
Investing in stocks may appear simple, but selecting the appropriate stock without a proven strategy can be tough. I've been trying to develop my $210,000 portfolio for a while, but the biggest hurdle is a lack of a clear entrance and exit strategy. Any feedback on this topic would be greatly welcomed.
Reminder that the s&p500 isn't the US equity market.
My concern with small caps is the efficent innovative companies are gobbled up by the large cap and leave the ETF index. There's no compelling reason why the remaining small cap companies should outperform large cap esp when you consider small companies use services and infrastructure provided by companies like Amazon. Also, S&P 500 companies employ a large number of staff. CEOs will quietly cut staff and sell busines unit to keep their shares high for the medium term.
The next four years could lead to deregulation which could mean more bad loans to small cap companies. Volatility is another concern.
3% over 10 years, or 3%/year for 10 years?
The GS and Vanguard analyses will be music to the ears of Value Stock Geek and his Weird Portfolio then? I'm just left wondering what report would leave the investment community believing there is bad news ahead for a market weighted S&P 500 over the next 10 years...
Well, OVERALL, it is harder, but AI will grow way FASTER than 7%/year/CAGR for sure, estimated at 36% for a DECADE!
Could be -30%, +40%, -10%, +20%
Great video. I reckon we might be OK for a while yet, with Trump election initially giving a bounce before who knows what? I think its best to wait and watch for the next few months. Great insight though and will definitely keep the small caps play front of mind.
Be careful not to invest in bond funds that are essentially insolvent and are looking for new liquidity to get their money out.
I don't see any sense in investing in bond funds at the present time, not when T-bills are offering such favorable interest rates. I'd suggest that bank savings rates of 5% should also be considered as an investment option.
I am highly confident in my prediction that Goldman Sachs will be both right and wrong in some combination in their forecasts over the next 10 years.
I'm more confident they will be mostly wrong
T212 is a Bulgarian co
Meanwhile …. Goldman Sachs quietly accumulates Bitcoin to the tune of $710M according to SEC filings
Can't time the market.
After ten years, no one will remember what Goldman said
Just stay invested. 100% equity until you die.
I'm beginning to think like that as well. Maybe just a small amount of bonds if you want a secure monthly income in old age.
I’m planning to sell a few stocks before I die and spend as what’s the point
So, the message is - everything is possible 😂😂😂
Large banks massively underwater on their bond portfolio are urging people to buy bonds? Sounds legit.
With markets experiencing significant volatility, inflation on the rise, and the Federal Reserve implementing substantial interest rate hikes, treasury yields are climbing rapidly. This has resulted to lot of losses for portfolios this quarter. I'm currently at a crossroads, considering whether to liquidate my $125k bond and stock portfolio. In this market conditions, I’m seeking guidance on how to navigate this uncertainty and potentially capitalize on the situation.
I agree, just because the market presents opportunities doesn't mean we should rush in headfirst. For this reason, we should look for appropriate market analysis or guidance or, alternatively, seek advice from certified market strategists.
Yeah, it’s expensive, but AI!
The problem with 212, can't transfer your investments. Caution
Do pie investments get you hosed on the spread? it knows you are buying and selling a basket, are they making their money off you doing that)
tech tech tech, its the only way we are going.
When were they last correct in their long term forecasts ?
I don’t get it one day you say don’t time the market then another you say divest… index fund all the way.. investing is boring by default for those who can’t afford losing it
It’s all a guess no one knows what will happen
How accurate were Goldman and Vanguard in their forecasts 10 years ago?
These predictions are based on long term statistics in the sense that they will not be accurate if the window is just 10 years.
They'll change their mind next quarter. More content for youtubers
Vanguard put 7% as the target, with an IQR from 3-11%. The actual figure was 13%.
When you consider the PE went from 20 to 30, the PB went from 2.7 to 5.3, and the Shiller CAPE went from 26 to 38, they were actually bang on.
some of the predictions are wild on cnbc from big names
Simply it’s “Forecast” it’s like open disclaimer right on your face. After every year forecast they will say “ ooops we got it wrong this year…” same story every year 😂😂
AI stocks are poised to dominate in 2024. I prefer NVIDIA because they are well-positioned to sustain long-term growth and serve as a foundational platform for other AI companies. I know an investor who has achieved over 200% returns with NVIDIA. I'm also open to any additional recommendations you may have.
I believe the next significant opportunity lies in AI. For sustained growth similar to META, it is essential to avoid impulsive decisions influenced by short-term market fluctuations. Emphasizing patience and a long-term perspective is crucial, and seeking financial advisory services can facilitate informed buying and selling decisions.
Warren Buffett once said to treat investing in securities like real estate-you don't constantly check for gains. So, the recent bitcoin price drop doesn't bother me. I keep dollar-cost averaging and adding to my position, and I'm up 200% year-to-date because of this strategy.
Regretting missing out on earlier Bitcoin investments, I kept funds in a HYSA. Now, with $200k to invest, I aim to avoid FOMO and buying at the peak. What's the best approach for a newbie to navigate the market?
Huh, I've made 27% in the 4 days since Trump got in
It’s crazy.
Our portfolio has jumped 50K+
You d'man Ramin. Considered analysis of the data from Goldman. I'm leaning the same way - definitely open to a future rebalance and I'm also pretty optimistic that we will see a rise in small caps IF the new administration creates an environment for business growth and manufacturing returns at strength within the US. Talk of potential USA manufacturing partnering with Mexico is a tantalising prospect...but a road beset with significant hurdles. Hopefully proposed tarifs are applied sensibly.
Ok I'll do the opposite, thanks 😂😂😂
It is easy to know, the world is changing and is doing fast, we may call recession on Spring because inflation was going high quick, its all about growth and contraction and now is contracting as we see corporations firing people everyday.
It's too early to get into bonds. My guess is that Goldman over invested in bonds because they thought the market was going to go down this year. They may have particularly over invested in corporate bonds. They are trying to dump them now by generating demand for them.
My recommendation is to wait for Trump to do something that causes investors to further get out of bonds and put their money into stocks.... which I believe will happen. Probably another round of corporate tax breaks.
At that time the price of bonds will be beaten down and they will be a bargain... that's when you invest in them and ride them till the next stock crash then sell and buy stocks. Rinse and repeat.
To summarize a quote from Buffet: 'When people are greedy that's when to be fearful.... when people are fearful that's when to be greedy'.
This has been on my mind, thank you for covering it Ramin! Excellent video, as always.
Hi @RalphWu55 Glad you enjoyed it!
Sounds like an ETF covering the S&P500 excl the magnificent seven might be a good option. My small cap ETF is certainly outperforming S&P
Nope. Super accelerated computing makes every business faster, more effective, efficient and less costly. Everyone uses technology in peace snd war . Stick to high ROIC , low debt , high margin companies. They won’t disappear. Second: too much vested interest in the markets rising .
Over 10 years, any comments are correct.
If you look at the wackos that Trump is putting in his administration, and his desire to "fight" the Fed, I'm getting into bonds for the foreseeable future.
The only thing of significance Goldman Sachs have contributed to the economy in the last ~25 years is the 2008 GFC. They're literally trying to predict the future, yet people take them seriously. The only thing we know for sure is that they will be wrong, but we don't by how much, because the stockmarket is unpredictable. The concentration of market capital in a relatively few (tech) companies does indeed means the S&P500 no longer reflects the wider economy and is overly leveraged in this area. As for investing in VALUE instead of GROWTH and diversifying your investments by (Geographical) region, this has been the advice for several years now, so GS aren't saying anything new.