What keeps analysts at Goldman Sachs up at night? In this recent note they provided 5 risks to their market and economic views. The short version here:
Five risks to our economic forecast
Our central forecasts look for accelerating growth in the DM economies, against the backdrop of continued low inflation and low policy rates. The main risks to this view are:
1) a reduction in fiscal drag is less of a plus than we expect;
2) deleveraging obstacles continue to weigh on private demand;
3) less effective spare capacity leads to earlier wage/inflation pressure;
4) Euro area risks resurface;
5) and China financial/credit concerns becomes critical.
Five risks to our market view
Five key risks may affect the mapping of our macro views into the market forecast:
1) long-dated real yields rise more sharply;
2) markets doubt G4 commitment to easy policy in the face of better growth;
3) low risk premia create valuation challenges;
4) margins compress more rapidly as wage share recovers;
5) and EM assets benefit more from the DM recovery or suffer more from local imbalances.
The long version here (via ZeroHedge).
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.