Goldman Sachs has a strong opinion on where the economy is heading. More specifically, they just put out two reports. One report is their prediction on where the stock market is heading in 2025. The other report is their prediction on where gold is heading in 2025. And what I want to do in this video is break down their reports and predictions, that way you can be a smarter investor and understand what Goldman Sachs is looking to do. to profit off of what's coming in 2025. So let me start with the punchline. What did Goldman Sachs say about stocks and gold, starting with the stock market?
On November 19th, this is what Goldman Sachs published. Quote, Goldman Sachs has forecasted that the S&P 500 index will reach 6,500 points by the end of 2025. Meaning, they're predicting that the stock market is going to rise by 11% between now and the end of next year. And then they said this.
Alongside Morgan Stanley, Goldman projects risk from tariffs and higher bond yields, but they expect corporate earnings to grow and the Federal Reserve to cut interest rates. Meaning Goldman says that there's economic risk ahead with the Trump tariffs and with the higher bond yields. But despite those economic risks, they think the stock market is going to continue to rally because companies are going to make bigger profits and because the Fed is going to cut interest rates to stimulate the stock market.
But what did they say about gold? Here's what they said on October 29th. They put out an article titled, Gold is predicted to climb higher than expected as records shatter, and they believe that gold prices will rise to $3,000 per ounce by the end of 2025, meaning they predict that gold prices will rise by around 10% between now and the end of next year. And if you want to read the reports for yourself, I will link them for you down in the description.
But now let's break this down, starting with their beliefs in the stock. market because obviously they're forecasting some economic uncertainty what they said is despite potential risks arising from tariffs and higher bond yields goldman foresees an 11 rise in corporate earnings and the economy the gdp to grow by two and a half percent in 2025. And this is where they're saying that there are a few ways that Goldman Sachs sees opportunity to profit in the stock market. Now, I got to give you the disclaimer here because investing has risks. You're never going to be able to guaranteed to make money when you invest. In fact, you will lose money at some point, so make sure always do your own due diligence.
Never blindly trust a random guy on YouTube, and never blindly trust what a bank is doing as well. I'm telling you this just for educational purposes so you understand what they're doing, okay? Goldman says, that they highlighted that the magnificent seven stocks, which includes the tech giants like Amazon, Apple, and Microsoft, will outperform other companies in the index next year.
But they believe that they're going to outperform the other stocks by a smaller margin than what we have seen in previous years. But that's not all. Goldman Sachs has also talked about ways that you can profit based off of a Trump presidency. What they say is that Goldman also recommended buying mergers and acquisitions candidates under a Trump administration because they're expecting that Trump is going to ease regulation on mergers and acquisitions, as well as companies that will gain from, quote, phase three of artificial intelligence, which includes companies like Apple and Snowflake.
So what Goldman Sachs is saying is that there are certain companies that will benefit from a Trump presidency, which include companies that could see a merger, meaning get acquired, because Trump is hoping. hoping to loosen regulations, which could include more mergers and acquisitions happening, and also more evolution and innovation in artificial intelligence stocks. And then they highlighted Apple and Snowflake. Now, let me go over what they said about gold. Again, I'm not telling you what to do.
I'm just telling you what they said. We cover all this in Market Briefs, by the way. Market Briefs is my free financial newsletter, where every day my team is working to break down what's happening in the financial markets, what is happening. It's a free newsletter. We publish it six times a week.
You can read it in less than five minutes every morning. And we have hundreds of thousands of investors that read Market Briefs every morning. So if you have not joined Market Briefs yet, well, I got the link for you to join down in the description below. Now, going over gold.
Here's what Goldman Sachs had to say about gold. First, they said, the gold usually trades in line with interest rates. And it doesn't really offer any yield because, like I've said before, when you buy gold, it's just sitting in a drawer looking back at you. And then they go on to say that gold. gold is typically less attractive to investors when interest rates are higher, and it's usually more desirable when interest rates fall.
But despite that, they believe the gold prices are going to rise by 10% because they think the interest rates are going to continue to fall. They believe the Fed is going to keep cutting interest rates, which will make gold a more attractive investment. Now, what's interesting about this is gold is generally a hedge against of concern and that's what Goldman Sachs said as well. They're talking about concerns in the economy, concerns to the global economy, geopolitical risks, and even some concerns about the dollar. So let me highlight you some of the concerns that Goldman Sachs highlighted.
What they said is that there are concerns about the risk of financial sanctions. And that's one of the reasons central banks around the world have been buying gold. That we have emerging market central bank purchases of gold rising.
Because the United States froze Russian central bank assets in 2022. And after that, we have more central banks that are concerned about what the United States might do. Which is why we've been seeing central banks around the world protect themselves against the United States by buying physical gold. Which is one of the reasons why we've been seeing gold prices skyrocket over the last couple of years.
Not just that, we also have the national debt concern. And what they say is that it looks like more... more and more people, including policymakers, meaning people in Congress, are concerned about the debt sustainability for the United States because we have, what they say, $35 trillion of national debt, even though we're getting close to $36 trillion of national debt.
And our national debt is 124% of our GDP. And this is where many central banks have the bulk of their reserves in U.S. Treasury bonds.
And policymakers may be increasing their concerned about their exposure to fiscal risks in the United States, meaning there are many countries around the world that are holding United States dollars. And now because the United States has all this debt, that these countries around the world are saying, huh, maybe this is a concern because the United States, yeah, they've been the strongest economy in the world, but they keep racking up all this debt and their economy isn't growing fast enough to keep up with all the debt that they have. And so what they're saying is, this is Goldman Sachs, that as more countries and more policymakers around the world get concerned about the United States debt, that could have these countries sell off their bonds, the United States dollars, and then shift their savings into physical gold. In fact, this is what we published in Market Briefs this morning. This is not what Goldman Sachs says.
This is what we published in Market Briefs. Japan and China, we just got a report, which said that they, last quarter, dumped a lot of United States dollars. bonds.
Japan and China are two of the largest foreign holders of United States dollars, meaning Japan and China have lent a lot of money to the United States and they're holding on to these United States dollars in debt. And what we found out is that last quarter, Japan sold the most ever bonds in one quarter and China sold the second most ever bonds in one quarter of United States dollars. Why? Why? Maybe because of what Goldman Sachs says.
Maybe because they're concerned about inflation. Maybe they're concerned about the economy. Maybe they're concerned about what Trump will do.
Maybe they're concerned about the economy. There could be a lot of reasons. But this is where Goldman Sachs says this could create opportunity for physical gold because not just what's happening here, but if other countries around the world are worried about the dollar, they may start ditching the dollar and buy physical gold.
And this is where Goldman Sachs goes on to say that gold may offer hedging benefits. against potential geopolitical shocks, including potential rises in trade tensions, Fed subordination risk, and debt fears. Meaning, gold has been a hedge, a safe haven forever.
And if there are more geopolitical concerns, because obviously we've been seeing what's going on in the Middle East, we've been seeing what's going on between Russia and Ukraine, all these things can create concern. And when investors are concerned, that's not generally good for markets, and that's what people want. safe havens and this is where Goldman Sachs says gold could be a potential safe haven. Now again, I'm going to say this one more time.
Don't blindly follow what anybody else does. You have to find the right portfolio, the right investments for you. That's how you build wealth. It's not about blindly following what somebody else does because Goldman Sachs has a different risk tolerance than you.
You have a different goal than them. You have a different risk tolerance and you have different investing abilities, skills, and how much money you can invest. And this is where what's important for you is just to understand what all of this is. other people are doing that way, you can make smarter decisions with your money.
And how you do that is by number one, paying attention to what's happening in the financial markets. And then number two is coming up with an investing strategy for you and not blindly copying somebody else's investing strategy. Because if you're just investing your money into the markets, let's say you're a long-term investor, you're just investing your money into the S&P 500, none of this matters.
You just keep doing your thing. Always be buying, A-B-B, that's what you do. Markets go up, you buy. Markets go down, you buy. Markets go sideways, you buy.
Goldman Sachs says sell, you buy. Goldman Sachs says bye, you bye. That's the way it works. Now for those of you that are a little bit more involved with their investments, a little bit more active, not a trader because I'm not a trader, I don't know how that world works, but if you're more active with your investments, this is where now what you want to look for is where is the opportunity?
And the reality is... nobody knows what's going to happen in 2025. Goldman Sachs has no idea. Morgan Stanley has no idea. I mean, these banks were also saying that nothing was going to happen bad in 2008. So, I mean, you have to take everything that banks, institutions, investors say with a grain of salt. Nobody knows what's going to happen next year.
We could see a recession next year. We could see markets boom next year. Your goal as a financially savvy investor is to find opportunity.
That way you could profit no matter what. And that comes back to your strategy. Understanding what are you going to do? Because the reality is if markets go down, that creates a great buying opportunity.
Market crashes and recessions create more millionaires than any other time. Period. When markets go up, well, that's a great time to watch your portfolio rise and maybe pick up some more investments. But the reality is...
markets go up, markets go down. Nobody knows what's going to happen in 2025. Every single person, every single bank, every single politician, every single economist, every single person on YouTube has an opinion. But what I like to say is financial opinions are like armpits.
Everybody's got a couple and some stink more than others. It doesn't matter what your opinion is. The reality is, where's the opportunity?
Because everybody feels like a financial genius when things are going up. When you see the value of investment going up, everybody feels like, oh, I know everything about investing. I knew what I was doing all along and I'm making so much money. When things go down, people start to panic.
And the reality is the way you build wealth is by cutting through the emotion, not being emotional. When things are going up, you don't get greedy. You don't get emotional.
When things are going down, you don't panic. You stick on the financials. When things are going up, you stop chasing investments. And you take a step back and you analyze the investment and think, is this something that I want to be a part of?
Is this something that's going to continue to have long-term growth? When things are going down, you take a step back and you say, Is this thing going to fail? Is this thing going to go to bankruptcy? Is this thing going to collapse?
Or is this a good buying opportunity? And see, this is the difficult part because this requires you to understand the psychology of investing in addition to the financial education. of investing. And that's the difficult part because when things are going good or bad, everybody's selling you emotion. You go on the internet, everybody's talking about how they're getting rich or how the world is going to end.
That's how the media works. Trust me, I know because I own a financial media company and I've seen it. Now, that's why we have been so invested in market briefs so we can avoid the sensationalism because all the news is in one email.
But the reality is that's the way the internet works. People are trying to sell you emotion. emotion.
And if they don't sell you emotion, they're not going to drive clicks and they're not going to make money. And so your job now is not to be driven by those emotions because emotions are the enemy of profits. And if you want to be a successful investor, you have to start by understanding what's going on, study what successful investors are doing, and then apply, not copy, apply what works for you to your portfolio because you have a different risk tolerance.
You have a different goal. You have a different investing strategy than me, banks. everybody else.
And that's why I want you to be a smarter investor, starting with understanding what is happening in the markets. And with that, I'll see you on YouTube tomorrow.