Goldman Sachs is slowly releasing their best ideas for 2014. The first two are attached below. If you have some ideas for 2014 feel free to share with the group. Here’s Goldman’s first two (via WSJ MoneyBeat):
- “Long 5-Year Eonia/Short 5-Year U.S. Treasurys.”
“The market reaction to the strengthening of ‘forward guidance’ could, contrary to our expectations, be associated with a flattening of the two-to-five year U.S. curve, at least initially.
“Currently, a very accommodative monetary policy stance is largely priced in in the U.S., while the market is underestimating the possibility that the European Central Bank can provide further easing, even by cutting the deposit rate below zero,”
- “Long S&P 500/Short AUD”
“This reflects what is perhaps the largest overarching theme of our market outlook – a belief that developed-market equities are well placed as long as US yields do not rise too quickly. The specific implementation of this trade recommendation that we will track is a long position in Dec 2014 S&P 500 futures, and a corresponding short position in Dec 2014 AUDUSD futures. Given our forecasts for both assets, with an S&P year-end target of 1900, and a year-end AUD target vs. the USD of 0.85, we see scope for both legs of the trade to generate potential returns.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.