Goldman Sachs Reverses 'Lost Decade' Call on U.S. Stocks, Raises 10-Year Return Forecast to 7%
nashnova research
Goldman Sachs raised its 10-year annualized S&P 500 return forecast from 3% to 7%, effectively abandoning its earlier 'lost decade' call; yet 7% still trails the index's ~10% long-run average since the 1950s, and Wall Street remains deeply divided on the outlook.
Why did Goldman change its mind?
The core logic boils down to one claim: the two key drivers of valuation multiples — corporate profit margins and interest rates — have drifted far from historical averages and are unlikely to revert anytime soon.
This means → the old playbook of anchoring future valuations to long-run averages no longer holds, in Goldman's view.
The numbers: S&P 500 profit margins sit at roughly 13% today versus just 5.5% in 1980; rates have risen since 2022 but remain well below their long-term mean.
In plain terms = companies earn more than they used to, and borrowing costs are still relatively low — those two facts prop up high valuations, and Goldman sees no quick reversal.
With valuations this high, where does the 7% come from?
When former chief strategist David Kostin issued the 3% forecast in October 2024, the S&P 500's CAPE — cyclically adjusted price-to-earnings ratio, a gauge that smooths profits over ten years to measure how expensive the market is — stood at roughly 38×.
CAPE has since climbed to 40×; the traditional historical relationship implies a return near 0%.
This means → new chief strategist Ben Snider's 7% forecast rests entirely on the assumption that valuations will stay elevated rather than mean-revert — if that assumption is wrong, returns could land far below 7%.
Why is 7% still below the historical average?
Snider himself concedes that favorable margin and rate trends are a double-edged sword.
These factors are unlikely to mean-revert, but they are also unlikely to keep improving at their past pace.
In plain terms = the good news is "the floor has been raised"; the bad news is "the ceiling is here too" — the story of margins climbing from 5.5% to 13% is hard to repeat.
What does the rest of Wall Street think?
Richard Bernstein cited the 2000–2009 period of negative S&P 500 returns, warning that today's high valuations carry similar risks.
Apollo chief economist Torsten Sløk and The Mather Group CIO Tim Ayles both recently said the S&P 500 could deliver flat returns over the next decade.
This reflects a divide that Goldman's pivot has not closed — the bulls revised their numbers, but the bears have not revised their logic.
I don't think investors should expect valuation multiples to fall back to their long-term historical averages. These two factors are unlikely to revert to long-run means, so the argument that multiples should revert to historical averages is not compelling.
Ben Snider
Goldman Sachs Chief US Equity Strategist
(June 29, Business Insider interview)
市场有风险，内容仅供研究参考，不构成投资建议。