Goldman Sachs stays overweight on equities despite high risk appetite
Goldman Sachs is maintaining an overweight stance on equities over a 12-month horizon, advising clients to buy pullbacks.
The bank’s Risk Appetite Indicator has reached its highest level since 2021, above 1.2, which historically correlates with lower near-term returns and a higher risk of corrections.
Elevated bond yields, high energy prices, and potential Strait of Hormuz escalation are key near-term headwinds.
The bank recommends selective hedging strategies to manage equity exposure, assuming inflation normalisation and a reopening of the Hormuz strait could support a more favourable macro environment.