🎙️ podcast Analysis January 27, 2026 Goldman Sachs Exchanges

Goldman Sachs: US Equity Valuation Myths Challenged Amid Emerging Market Rotation

Emerging Markets Ex-China US Treasuries
Conviction MEDIUM
Risk Profile 1.4/10 (LOW RISK)
Horizon 12-24 months
Signal Snapshot Core Theme: Global Equity Allocation

High valuations predict lower returns

Statistical evidence contradicts mean reversion assumptions

Earnings divergence; Currency stabilization; GDP volatility

Executive Summary

Goldman Sachs' Chief Investment Officer Sharmin Mossavar-Rahmani presents a contrarian view on equity valuation theory that challenges widespread investor assumptions. Her team's analysis of 32 valuation observations across eight metrics and four regions reveals only one instance of statistically significant mean reversion, directly contradicting the market's belief that high valuations predict lower future returns. This finding undermines the bearish positioning many investors have adopted base...

Key Investment Opportunity

Emerging Markets Ex-China Tactical Allocation

Goldman expects EM ex-China to deliver 8% returns in 2026 vs 7% for US and 6% for non-US developed, driven by currency stabilization and selective country fundamentals

...and 1 more investment opportunities

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