David Solomon, chief government officer of Goldman Sachs, speaks in the course of the Milken Institute Global Conference in Beverly Hills, April 29, 2019.
Patrick T. Fallon | Bloomberg | Getty Images
Investors should not anticipate the bull run in stocks and different belongings to proceed at present ranges, in accordance with Goldman Sachs CEO David Solomon.
Equities are on observe to take pleasure in three straight years of double-digit returns, as measured by the S&P 500, thanks in half to the extraordinary assist supplied by the Federal Reserve and different central banks on the onset of the coronavirus pandemic. That growth has spilled over into different belongings, together with actual property, artwork and cryptocurrencies.
“We would expect that we’re not going to see the same rate of returns in equities and many other assets over the next few years that we’ve seen over the last couple of years,” Solomon stated Tuesday in response to a query from Joe Kernen on CNBC’s “Squawk Box.”
“I’m not a believer that double-digit equity returns compounding in perpetuity is something as an investor you should expect,” Solomon stated. “I’ve been involved with a number of investment committees and charitable foundations, college boards, etc, and certainly my mindset is the returns we’ve received over the last three to five years are different than what we should expect as we go forward.”
Solomon, who leads one of many world’s premier world funding banks, was requested to weigh in on a slew of subjects from inflation to bitcoin, China and the return to workplace work.
While banks have rebounded from issues final yr that the pandemic would crimp income, Solomon stated that he nonetheless felt shares of Goldman have been comparatively undervalued. Goldman shares have surged about 48% this yr.
“Like any other CEO, you know, I think that my company and my stock is underappreciated and undervalued,” Solomon stated. “I think the earnings power of the traditional financial services sector is quite powerful, and we get very, very low multiple on those earnings.”
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