Goldman Sachs Expects S&P 500 to Return Only ~6.5% Yearly Over Next Decade — But Offers Ways to Do Better

Analysts at Goldman Sachs just dropped a reality check for long‑term investors: the iconic S&P 500 (S&P) might deliver only about 6.5% annualized returns through 2035 — far lower than the ~10% annual pace many have come to expect. Why? Because the current valuations on many large‑cap stocks — especially the so-called “AI titans” — are already elevated, leaving less room for outsized gains. The publishing of this forecast stirred some investors, possibly cooling expectations after recent rallies that were driven largely by tech’s boom. Still, Goldman Sachs isn’t saying “don’t invest.” Instead, they laid out three strategies that could outperform the S&P over the next decade: Look outside the U.S. International markets, particularly developed ones, are currently cheaper than U.S. large caps. For example, the Schwab Fundamental International Equity ETF (FNDF) has gained more than 35% year‑to‑date — a stronger performance than the S&P this year. Consider small‑ and mid‑cap U.S. stocks. Smaller companies tend to be cheaper and may offer better growth upside compared to richly valued large caps. An example: the iShares Core S&P Small-Cap ETF (IJR) offers exposure to this undervalued corner of the market. Select individual value‑oriented names. If you’d rather pick stocks than hold an index, a firm like Berkshire Hathaway may be a more attractive long‑term bet than the broad S&P, especially under its leadership’s projected value‑first investment style. Bottom line: If your expectations are still set on “classic” double‑digit returns, Goldman suggests you might want to tilt your portfolio toward international equities, small caps, or individual value names — rather than relying on the S&P 500 alone. #SlimScan #GrowthStocks #CANSLIM