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Goldman Sachs: “We expect a return on a more” normal “investment

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For Goldman Sachs it is time to return to a more “normal” investment strategy after the excesses made by technology stocks in the last 18 months.

Goldman, inflation helps traditional investing

There alpha generation (the manager’s ability to create extra returns and beat the benchmark) is poised to return to the wealth management industry as a post-pandemic world marked by inflation and from higher interest rates, growth will be significantly less concentrated.

Like this Peter Oppenheimer, Goldman Sachs chief global equity strategist, in a note stating that “we have returned to a more” normal “cycle in which we expect investors to be rewarded for making sector and equity decisions related to potential growth versus what is priced. “. “All of this should mean a return to alpha.”

The current bull cycle it was not an ideal environment for stock picker, as most stocks swung in unison in the Covid-induced crash. However, this market return has pushed valuations to new highs, particularly in the growth-oriented tech sector, which could lead to lower overall returns and less tech dominance in hawkish monetary policy, the Wall Street bank pointed out.

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THE technology stocks, especially the mega-cap names, have experienced much stronger earnings growth than the rest of the corporate sector in recent years, Goldman said. FAAMG stocks – Facebook (now Meta Platforms), Amazon, Apple, Microsoft and Google’s Alphabet – now represent 50% larger than the entire global energy industry and nearly five times the size of the global auto industry excluding Teslaaccording to Goldman.

“I think that we are about to enter a new environment where the influence of technology is rapidly expanding to impact virtually every industry, ”the expert said. “Moving forward it will become less easy to differentiate between what is and what is not a tech company, and this should broaden opportunities across more sectors.”

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