High Yield Stocks Are Now More Likely To Beat The Market

There's been a lot of buzz surrounding a report that was issued by Goldman Sachs earlier this week regarding their expectations for the stock market over the next decade. The report was published in a Bloomberg article on Monday, titled "Decade of Big S&P 500 Gains is Over, Goldman Strategists Say" and it paints a grim picture for stock market investors. According to their analysts, they expect that between now and 2034, the S&P 500 will only provide an average yearly return of 3% per year. They also see a roughly 72% chance that the benchmark index will trail Treasury bonds and a 33% likelihood they'll lag inflation through 2034.

The article rightfully points out that we here in America have been pretty spoiled over the past decade in terms of stock market returns. Between 2014 and 2024, the S&P 500 provided an average yearly return of 13%. This is much higher than the typical long-term average, which is between 9 and 10%. The S&P 500 is on track to outperform the rest of the world in eight of the last 10 years, according to data that was compiled by Bloomberg. This year alone the market is up an incredible 22%, and it's up nearly 90% over the course of the last five years. But all of these incredible returns, at least according to analysts at Goldman, are going to slow down soon significantly.

[buzzz]

7pm on a Friday night, this is a surprise!

[pauline-oq]

Every crash/collapse brings with it an equivalent market chance if you are early informed and equipped, I've seen folks amass up to $1m amid economy crisis, and even pull it off easily in favorable conditions. Unequivocally, the collapse is getting somebody somewhere rich.

[PeteReinert]

Are these the same geniuses whose mutual funds and active ETFs can't beat the S&P 90% of the time? Love the channel, DB.

[macdavid]

Im a big dividend investor, but inflation will push all stocks higher.

[spacecowboy]

If I had a dollar for every harbinger of doom that predicts pain and suffering I would have pulled off the stock market long ago, and yet it wouldn't matter because they would have made me a millionaire.

[ILoveTinfoilHats]

Those are some oddly specific numbers for their confidence. 72% chance worse than bonds? Where did they get that from???

[theeagle]

I bought some SCHD, VHT and VYM, reducing tech stocks.

[outbackretirement]

I do think there is evidence supporting lower gains over the next ten years. However, countering those are the collapse of China’s economy, the ongoing wars, and population declines of Europe, Japan, Korea and others. All of which leads to most wanting a safe harbor to invest their money. Despite the US having its own problems, population growth, resources, innovation, technology, and manufacturing are not among them. The majority of the world’s available investment pool is starting to come here now. And according to geopolitical experts, will continue well into the mid 2030’s. While 20% gains may be in the rear view for a while, expect 10%+ US index broad market fund returns over the long haul. US is likely to be the world’s largest economy for many more decades to come.

[jamesmatz]

Thanks DB! Very sobering and clear-eyed advice. Recalls Alan Greenspan's "irrational exeuberance" argument.

[JP-iqpu]

Covered call Index funds could do decent in that type of market. Many are already Yielding around 8%-20% now.

[JamesKjones-nr]

It's enticing to consider purchasing some stocks in this bull run. I'm contemplating investing more than $300k for retirement. While the bull run can generate short-term excitement, i also need long-term investment strategy

[chessdad]

Some of me wants to agree with GS, but the fact that a lot of money is going into 401ks with a lot into S&P500 seems to contradict that. And there is the Fed. I cannot believe they will sit there without playing with the dials if folks 401k are dragging.

[druvaciam]

NVDA is far from being the most overvalued, it is fairly valued, maybe even undervalued. Its profit is growing very fast and demand is still strong. AAPL is more overvalued.

[XanderDDS]

gotta leverage the statement 'with that being said, ' two times to maximize those gains with each video!

[phillippoggi]

When was the last time they were correct with their predictions? I’m sure they have no conflict of interest to see here.

[vskhouse]

According to Kevin O’Leary, as well as Tom Lee (Fundstrat) the main driver in the current stock market market is the $1-2 trillion of cash sitting on the sidelines, which came from all the USG stimulus. For instance, the CHIPs act still has half a trillion unallocated!!

[kurtKking]

I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.

[the_stevecooper]

Or like the man said . . .

“Be Fearful When Others Are Greedy And Greedy When Others Are Fearful.”

[garry]

I still say Buffett sold billions of stock for a reason. And he is usually way ahead of what's gonna happen because he is dealing with big share amounts that can't be dumped in an afternoon. It wouldn't surprise me to see a good correction in 2025 or 2026. Like 25-35 pct.

[pigeoncafe]

Thanks for sharing. The best part of dividend and income investing is not that you get cash out of it, it is watching it grow, sure when we retire the $ will be great, but I just keeping looking to add to it. Heck, I might never retire, this is fun.