Global Opportunity Asset Locator

Goldman Sachs remains pro-risk for the long term but recommends tactical caution due to elevated risk appetite indicators and narrow earnings growth driven by AI capex. Investors are advised to use selective hedging such as put spread collars to navigate potential corrections.

Key Takeaways

• 1.The report maintains a modestly pro-risk 12-month outlook (OW equities, UW credit) while shifting to a neutral tactical stance for the 3-month horizon.
• 2.Micro tailwinds (AI capex boom) are currently dominating macro headwinds, driving a narrow equity rally led by global Tech hardware.
• 3.The Risk Appetite Indicator (RAI) has risen above 1.2, suggesting a higher risk of near-term market corrections and moderated returns.

Table of Contents

• Balancing micro tailwinds and macro headwinds
• Tactically neutral and remain modestly pro-risk
• The macro backdrop has shifted
• Micro tailwinds have dominated macro headwinds
• Risk Appetite Indicator (RAI)
• Shift in stagflationary shock pricing
• Risk of a 60/40 portfolio drawdown
• Equity valuations
• Inflation outlook
• Credit yields
• Risk mitigation strategies
• Cross-asset correlation
• Macro monitor