Goldman Sachs Favors Stocks Over Credit for Next 12 Months as Late-Cycle Risks Grow

Goldman Sachs favors equities over credit over the next 12 months as risks tied to the late stage of the economic cycle increase.

Walter Bloomberg reported on September 2 that Goldman Sachs sees solid corporate earnings, slowing but resilient economic growth and low odds of a US recession supporting stocks. The bank recommended an overweight position in equities and an underweight stance on credit assets.

It added that high bond yields, fiscal concerns and sticky inflation could limit further gains in the stock market.

To guard against those risks, Goldman Sachs recommended diversifying portfolios with low-volatility stocks, high-dividend shares, gold and real assets.