Goldman Sachs says a traditional 60/40 portfolio may no longer be sufficient in a market shaped by artificial intelligence and persistent inflation risks.
In a new report titled “How the Iran War Is Impacting Investment Portfolios,” Goldman Sachs outlines a structural shift in how investors should allocate capital over the next decade.
According to the bank, the ideal mix of assets in a portfolio should balance growth, protection and stability.
“Our rule of thumb for optimal portfolio construction in the next decade is one-third of assets exposed to innovation, one-third protecting against inflation and one-third for risk mitigation.”
For the first bucket, Goldman says selectivity is key in investing in AI and tech stocks.
“In the innovation bucket, you’ll still have equities exposed to tech and AI, but investors need to be more selective with both more winners and losers due to AI disruption.”
As for the second bucket, the bank highlights inflation as a persistent risk that requires exposure to real assets and cash flow-generating equities.
“In the inflation bucket, you’ll have real assets, maybe some gold and inflation-protected Treasuries, as well as some shorter-duration value stocks that have real cash flow growth potential (such as infrastructure stocks) that can counter inflation risk over the long run.”
And for the last bucket, Goldman signals a broader approach beyond traditional bonds.
“And in the risk-mitigation bucket, you can have bonds, but there is more benefit from allocations to factors such as defensive equity styles (like low-volatility equities and quality equities), selective safe-haven foreign exchange and allocations to alternatives.”
The bank notes that the three-pronged framework shifts the focus away from the traditional 60/40 split toward a more dynamic balance across innovation, inflation protection and risk mitigation.
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