Finance
Experts push back on Goldman Sachs' forecast for low returns
A version of this post first appeared on TKer.co
Goldman Sachs’ that the S&P 500 will deliver 3% annualized nominal total returns over the next 10 years has gotten a lot of attention. (Read TKer’s view and .)
I think Ben Carlson of Ritholtz Wealth Management it best: “It’s rare to see such low returns over a 10 year stretch but it can happen. Roughly 9% of all rolling 10 year annual returns have been 3% or less… So it’s improbable but possible.”
Investors would probably love to hear a more decisive view. But , and these kinds of imprecise assessments are the best we can do as we manage our expectations.
That said, last week came with a lot of Wall Streeters pushing back on Goldman’s forecast.
JPMorgan Asset Management (JPMAM) expects large-cap U.S. stocks to “return an annualized 6.7% over the next 10-15 years,” .
“I feel more confident in our numbers than theirs over the next decade,” JPMAM’s David Kelly . “But overall, we think that American corporations are extreme — they’ve got sharp elbows and they are very good at growing margins.“
.
Expectations for , , and have been hot topics lately. They’re trends that Ed Yardeni of Yardeni Research also expects to drive stock prices higher for years to come.
“In our opinion, even Goldman’s might not be optimistic enough,” Yardeni . “If the productivity growth boom continues through the end of the decade and into the 2030s, as we expect, the S&P 500’s average annual return should at least match the 6%-7% achieved since the early 1990s. It should be more like 11% including reinvested dividends.”
“In our view, a looming lost decade for U.S. stocks is unlikely if earnings and dividends continue to grow at solid paces boosted by higher profit margins thanks to better technology-led productivity growth,” Yardeni said.
Datatrek Research co-founder Nicholas Colas is encouraged by where the stock market stands today and where it could be headed.
“The S&P 500 starts its next decade stacked with world class, profitable companies and there are more in the pipeline,” Colas wrote on Monday. “Valuations reflect that, but they cannot know what the future will bring.“
He believes “the next decade will see S&P returns at least as strong as the long run average of 10.6%, and possibly better.“
Could something ‘very, very bad’ occur?
Colas noted that historical cases of
“History shows that 3% returns or worse only come when something very, very bad has occurred,” Colas said. “While we are relying on press accounts of Goldman’s research, we have read nothing that outlines what crisis their researchers are envisioning. Without one, it is very difficult to square their conclusion with almost a century of historical data.“
Because of the way Wall Street research is distributed and controlled, not everyone is able to access every report, including experts who may be asked to respond to them.
Goldman shared the report with TKer. Regarding the issue Colas flagged, Goldman does discuss those catalysts but actually highlights them as .
That said, very bad things have happened in the past, and they could happen again in the future. And those events could cause stock market returns to be poor.
“Forecasting one form of economic disaster or another over the next 10 years is not much of a reach; you will be hard-pressed to think of any decade where some economic calamity or another didn’t befall the global economy,” Barry Ritholtz of Ritholtz Wealth Management . “But that’s a very different discussion than 3% annually for 10 years.”
This leads me to my conclusion: It is very difficult to predict with any accuracy what will happen in the next 10 years. in their report. There are good cases to be made for weak returns as well as strong returns as argued by Yardeni and Colas.
Who will be right? We’ll only know in hindsight.
Generally speaking, I’m of the mind that the because we have a , and earnings are the . And there’s never been a challenge the economy and stock market couldn’t overcome. After all, .
“I have no idea what the next decade will bring in terms of S&P 500 returns, but neither does anyone else,” Ritholtz . “I do believe that the economic gains we are going to see in technology justify higher market prices. I just don’t know how much higher; my sneaking suspicion is one percent real returns over the next 10 years is way too conservative.”
Review of the macro crosscurrents
There were a few notable data points and macroeconomic developments from last week to consider:
Card spending data is holding up. From JPMorgan: “As of 15 Oct 2024, our Chase Consumer Card spending data (unadjusted) was 1.5% above the same day last year. Based on the Chase Consumer Card data through 15 Oct 2024, our estimate of the U.S. Census October control measure of retail sales m/m is 0.69%.“
From BofA: “Total card spending per HH was up 1.9% y/y in the week ending Oct 19, according to BAC aggregated credit & debit card data. Spending growth has recovered in the sectors that were most impacted by Hurricane Milton, e.g. clothing, furniture & transit. Even beyond these sectors, we saw broad-based increases in spending growth in the week ending Oct 19.“
Unemployment claims tick lower. declined to 227,000 during the week ending October 19, down from 242,000 the week prior. This metric continues to be at levels historically associated with economic growth.
Consumer vibes improve. From the University of Michigan’s : “Consumer sentiment lifted for the third consecutive month, inching up to its highest reading since April 2024. Sentiment is now more than 40% above the June 2022 trough. This month’s increase was primarily due to modest improvements in buying conditions for durables, in part due to easing interest rates.”
Home sales fall. decreased by 1% in September to an annualized rate of 3.84 million units. From NAR chief economist Lawrence Yun: “There are more inventory choices for consumers, lower mortgage rates than a year ago and continued job additions to the economy. Perhaps, some consumers are hesitating about moving forward with a major expenditure like purchasing a home before the upcoming election.”
Home prices cooled. Prices for previously owned homes declined from last month’s levels, but they remain elevated. From the : “The median existing-home price for all housing types in September was $404,500, up 3.0% from one year ago ($392,700). All four U.S. regions registered price increases.”
New home sales rise. jumped 4.1% in September to an annualized rate of 738,000 units.
Mortgage rates tick higher. According to , the average 30-year fixed-rate mortgage rose to 6.54%, up from 6.44% last week. From Freddie Mac: “The continued strength in the economy drove mortgage rates higher once again this week. Over the last few years, there has been a tension between downbeat economic narrative and incoming economic data stronger than that narrative. This has led to higher-than-normal volatility in mortgage rates, despite a strengthening economy.”
There are in the U.S., of which 86 million are and of which are . Of those carrying mortgage debt, almost all have , and most of those mortgages before rates surged from 2021 lows. All of this is to say: Most homeowners are not particularly sensitive to movements in home prices or mortgage rates.
Offices remain relatively empty. From : “Peak day office occupancy on Tuesday fell seven tenths of a point last week to 60.7%. Most of the 10 tracked cities experienced lower peak day occupancy than the previous week, likely due to the federal holiday on Monday. Los Angeles had its highest single day of occupancy since the pandemic, up 1.9 points from the previous Tuesday to 56.3%. The average low across all 10 cities was on Friday at 31.9%, down eight tenths of a point from the previous week.“
CEOs are less optimistic. The Conference Board’s in Q4 2024 signaled cooling optimism. From The Conference Board’s Dana Peterson: “CEO optimism continued to fade in Q4, as leaders of large firms expressed lower confidence in the outlook for their own industries. Views about the economy overall—both now and six months hence — were little changed from Q3. However, CEOs’ assessments of current conditions in their own industries declined.
Moreover, the balance of expectations regarding conditions in their own industries six months from now deteriorated substantially in Q4 compared to last quarter. Most CEOs indicated no revisions to their capital spending plans over the next 12 months, but there was a notable increase in the share of those expecting to roll back investment plans by more than 10%.“
Survey signals growth. From S&P Global’s : “October saw business activity continue to grow at an encouragingly solid pace, sustaining the economic upturn that has been recorded in the year to date into the fourth quarter.
The October flash PMI is consistent with GDP growing at an annualized rate of around 2.5%. Demand has also strengthened, as signalled by new order inflows hitting the highest for nearly one-and-a-half years, albeit with both output and sales growth limited to the services economy.”
Keep in mind that during times of perceived stress, soft data tends to be more exaggerated than actual hard data.
Business investment activity ticks higher. for nondefense capital goods excluding aircraft — a.k.a. — increased 0.5% to a record $74.05 billion in September.
Core capex orders are a , meaning they foretell economic activity down the road. While the growth rate has , they continue to signal economic strength in the months to come.
Most U.S. states are still growing. From the Philly Fed’s September report: “Over the past three months, the indexes increased in 34 states, decreased in 10 states, and remained stable in six, for a three-month diffusion index of 48. Additionally, in the past month, the indexes increased in 36 states, decreased in seven states, and remained stable in seven, for a one-month diffusion index of 58.”
Near-term GDP growth estimates remain positive. The sees real GDP growth climbing at a 3.3% rate in Q3.
Putting it all together
The outlook for the stock market remains favorable, bolstered by . And earnings are the .
Demand for goods and services as the economy continues to grow. At the same time, economic growth has from much hotter levels earlier in the cycle. The economy is these days as .
To be clear: The economy remains very healthy, supported by very . Job creation . And the Federal Reserve – having – has .
Though we’re in an odd period in that the hard economic data has . Consumer and business sentiment has been relatively poor, even as tangible consumer and business activity continue to grow and trend at record levels. From an investor’s perspective, is that the hard economic data continues to hold up.
That said, analysts expect the U.S. stock market could , thanks largely due to . Since the pandemic, companies have adjusted their cost structures aggressively. This has come with and , including hardware powered by AI. These moves are resulting in positive operating leverage, which means a modest amount of sales growth — in the cooling economy — is .
Of course, this does not mean we should get complacent. There will — such as , , , , etc. There are also the dreaded . Any of these risks can flare up and spark short-term volatility in the markets.
There’s also the harsh reality that and are developments that all long-term investors to experience as they build wealth in the markets. .
For now, there’s no reason to believe there’ll be a challenge that the economy and the markets won’t be able to overcome over time. , and it’s a streak long-term investors can expect to continue.
A version of this post first appeared on TKer.co
The Senate Finance Committee is set to hear from a panel of Treasury nominees that includes a pick Democrats said was unaware of economic fallout planning ahead of the Iran war and a former executive at Secretary Scott Bessent’s hedge fund.
The July 16 confirmation includes George McMaster, who was the trading chief at Key Square Group, a macro hedge fund run by Bessent, and Sriprakash Kothari, whose behind-the-scenes answers to the panel during the vetting process raised red flags for ranking member Ron Wyden (D-Ore.).
Finance Chair Mike Crapo (R-Idaho) announced Thursday the panel will consider McMaster and Kothari …
 
Author: Leonardo Aguilera, CEO, Banreservas
Banreservas’ international expansion strategy is centred on strengthening economic ties with the Dominican diaspora as a strategic economic partner, rather than just operating as a full retail bank abroad, and the bank has successfully used mortgage fairs as part of this expansion strategy. These client-centric engagement events bring together diaspora clients, credible Dominican real estate developers, fiduciary-backed projects and bank representatives in one venue to help address key diaspora challenges such as distance and lack of trusted intermediaries, legal and documentation uncertainty, difficulty assessing projects remotely and limited access to tailored financing.
By simplifying the sending process from the US and Europe, reducing operational friction, and offering greater convenience and security, Banreservas has incentivised increased use of formal remittance channels. This strategy has had, and is expected to continue to have, a highly positive impact on remittance flows to the Dominican Republic, both in terms of volume and formalisation.
Reimagining the diaspora relationship
Banreservas’ model relies on representative offices set in strategic cities to provide advisory, pre-qualification and customer support services, while the financing and account opening itself is referred to Banreservas in the Dominican Republic, where they are operatively managed and booked.
The US (New York and Miami) and Spain (Madrid) were chosen as priority hubs to channel diaspora engagement and long-term investment because they are home to some of the largest and most economically active Dominican communities worldwide. By establishing representative offices in these strategic locations, Banreservas delivers tailored financial services to historically underserved expatriate communities, enabling them to invest, save, and build wealth in the Dominican Republic while contributing to national economic development, unlocking sustainable growth opportunities and deepening its role as a financial bridge between Dominicans abroad and their home country.
Banreservas uses mortgage fairs to compress what is traditionally a long, fragmented cross‑border process into a single, guided experience that combines education, advisory, and support. Diaspora clients can receive on-the-spot pre-qualification, explore real estate projects nationwide, and receive information and guidance about loan processes, although final approvals and disbursements are processed in the Dominican Republic.
The response in the US and Madrid has been characterised by sustained momentum and the diversity of participant profiles, from first-time buyers to repeat investors and returning nationals, which suggests that the fairs are resonating beyond a narrow segment of the diaspora. In US cities with long-established Dominican communities, the fairs have evolved into anticipated events rather than exploratory initiatives, with those in New York and Lawrence generating financing exceeding $49m. However, the initiative was newer in Europe, so the response in Madrid followed a slightly different trajectory, with early editions focusing heavily on education and orientation. That said, the first fair in Madrid attracted thousands of participants and closed with financing requests of more than $21m.
Risk mitigation is central to the model and projects are carefully vetted, many supported under a fiduciary account or an estate asset trust fund and backed by clear legal frameworks. Banreservas’ direct involvement is one of the defining features of its diaspora strategy to ensure transparency, regulatory compliance and investor protection throughout the process. By offering direct access to Banreservas’ experts, vetted developers, fiduciary-backed projects and consistent financing terms, these events are helping create a relationship-building platform that improves transparency, credibility and institutional confidence. Internal customer experience reports emphasise that word-of-mouth referrals, repeat attendance, and post-fair engagement are among the clearest indicators that trust has been established organically, particularly within close-knit diaspora communities. Banreservas’ role as the national leading institution further reassures clients investing from abroad.
Transaction to transformation
Rather than a single-product offering, Banreservas approaches diaspora customers with a portfolio mindset, providing a robust cross-border selection including mortgage loans, savings and checking accounts, remittance-linked products and investment solutions tied to real estate development.
Banreservas has deliberately adopted a scalable and selective expansion logic
Remittances are a core strategic pillar of Banreservas’ international expansion, and the creation of new digital channels and specialised financial products are helping transform remittances into a gateway for deepening financial inclusion. The Remesas Reservas app enables Dominicans abroad to send money from the US and Europe using international cards, with funds credited directly to bank accounts or debit cards in the Dominican Republic, eliminating the need for cash, queues, or physical travel. The app is complemented by the home delivery remittances service, which extends financial access to rural communities that were previously excluded from the formal financial system. Service performance data shows that 97 percent of remittances sent through the app complete the entire process digitally, while 94 percent are received directly in bank accounts, strengthening financial traceability. This supports the sustainability and potential growth of remittance inflows to the Dominican Republic that already exceeds $12bn annually, while also expanding the banked customer base and improving the overall efficiency of the national financial ecosystem.
The strategy is further strengthened by the introduction of remittance-based consumer and mortgage loans, specifically designed for remittance recipients. These products allow recurring remittance flows to be converted into formal financial history, facilitating access to credit, and reinforcing the ‘bankarisation’ process. As a result, remittances evolve from a basic transfer mechanism into a financial development tool, integrating beneficiaries into the banking system with solutions tailored to their real income patterns and needs.
Mortgage financing in the Dominican Republic is embedded within a broader set of banking solutions designed to support the full investment and ownership journey. At the core are residential mortgage products structured for non-resident clients looking to acquire property in the Dominican Republic. These are complemented by linked deposit and savings accounts, which allow clients to organise funds, manage payments and maintain an ongoing banking relationship once the purchase process begins. In parallel, Banreservas leverages its digital channels and remittance services to facilitate the movement of funds and day-to-day interaction with Banreservas, reinforcing continuity beyond the initial transaction.
For first-time diaspora investors, the emphasis is on financial orientation and readiness with solutions structured to simplify entry into the formal mortgage system in the Dominican Republic. For returning nationals, products and advisory conversations are typically aligned with reintegration objectives. In both cases, the underlying principle is adaptability within a controlled institutional framework, rather than bespoke products that introduce additional risk.
They have the support of President Luis Abinader, who has created the conditions for Dominicans in the diaspora take advantage of the macroeconomic stability, legal security, and full guarantees that receive all foreign investors who trust in the Dominican Republic to make their business.
Modernising remittance ecosystem
Modernising the remittance ecosystem combined with specialised financial products generates a direct multiplier effect on strategic sectors, strengthening the real economy and territorial development. In the construction sector, the remittance mortgage loan transforms recurring remittance flows into formal financing capacity for homeownership and has taken centre stage in Banreservas’ participation in international mortgage fairs. Diaspora demand supports property acquisition and upstream activities such as project development, construction services, materials supply, legal services and professional employment.
Equally important is the impact on financial deepening and formalisation. When diaspora investors enter the banking system through regulated mortgage channels, their participation strengthens the use of formal financial products, thereby expanding the reach and resilience of the financial system. This dynamic is a key contribution to economic maturity, as it encourages long-term financial relationships rather than one-time transactions.
From a tourism perspective, the strategy strengthens the economic and emotional ties between the diaspora and the country. Home purchases financed through mortgage loans paid via remittances promote more frequent visits, longer stays, and increased spending on tourism-related services, while also encouraging investment in vacation properties and second homes. Additionally, increased formal income and financial inclusion among remittance-receiving households boosts domestic consumption, benefiting transportation, commerce and service sectors closely linked to tourism.
The scalable model
Banreservas has deliberately adopted a scalable and selective expansion logic, prioritising model stabilisation in proven markets before extending to new ones. However, any future expansions are likely to be opportunity-driven and phased, to ensure that each new market sustains long-term client relationships. This strategy allows for progressive expansion, but only where three conditions converge: concentrated Dominican diaspora communities with sustained economic ties to the Dominican Republic, regulatory and operational feasibility, particularly the ability to support activity through representative offices or equivalent structures, and demonstrated demand signals.
The next three to five years points to a qualitative shift in diaspora investment behaviour. First, there is a clear movement from sentimental ownership to strategic investment. Second, diaspora investors are showing a stronger preference for formal, institutionally mediated channels. And finally, the younger diaspora segment tends to prioritise entry-level or future-orientated assets, while more established individuals focus on retirement, anchoring, or reintegration-linked purchases. This diversification of motivations is influencing how Banreservas structures advisory conversations and sequences client engagement over time.
With diaspora investment contributing to national economic development primarily by transforming external household income into structured, long-term domestic capital, Banreservas’ long-term objectives are driving financial inclusion, fostering foreign direct investment and supporting key productive sectors. By empowering confident diaspora investment, Banreservas reinforces its leadership role in national development while expanding its international footprint in a sustainable way by adopting a focused model that strengthens value creation in the Dominican Republic through targeted international interaction.
From a growth perspective, the expansion allows Banreservas to diversify its customer acquisition channels by engaging Dominican communities abroad at earlier stages of their financial decision-making. From an economic development standpoint, the strategy is goal orientated.
By facilitating diaspora investment in housing and related sectors in the Dominican Republic, Banreservas acts as a conduit that transforms external income flows into productive domestic investment.
TORONTO — Insurance provider Intact Financial Corp. says it had higher catastrophe losses and large losses in the second quarter than it initially expected.
Intact Financial reported that its combined catastrophe and large losses were $247 million above its expectations for the second quarter on a pre-tax and net of reinsurance basis.
The combined higher losses amount to $1.08 per diluted common share after tax.
Total catastrophe losses reached $416 million on a pre-tax basis during the second quarter and net of reinsurance.
The company says catastrophe losses in Canada were due to weather events, while commercial fires drove losses in the United Kingdom and Ireland.
Intact Financial says the increase in large losses included higher-frequency fire claims as well as other property losses across different geographies.
This report by The Canadian Press was first published July 8, 2026.
Companies in this story: (TSX: IFC)
The Canadian Press
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