Goldman Sachs has released a report predicting a 3% annualized return for the S&P 500 index over the next decade, with a real increase of 1%. This is a significant drop compared to the index's 13% annualized total return over the past ten years. The forecast is below the widely expected 6% return rate.
According to David Kostin, Goldman's chief US equity strategist, the projected 3% annualized nominal total return for the S&P 500 by 2034 ranks in the seventh percentile of ten-year returns since 1930. Kostin's team notes that their predictions fall within a range of +7% to -1%, reflecting the inherent uncertainty in forecasting such a distant future.
Goldman's report emphasizes that while the stock market's 13% annualized return in the last decade surpasses the long-term average of 11%, future returns are expected to be more modest.
