"We expect S&P 500 earnings to be up, actually, about 12 percent. We think the market is going to not be willing to pay as much as they did at the end of 2021 for the same earnings. So, we expect market multiples, the valuations that you highlighted, to actually contract a little bit.
So, our base case for the whole year was about a 6 percent total return, including dividends. Obviously, from today's levels, it's about 16 percent.
One thing we always do for clients is think about a base case, a good case, and a bad case. Our base case has about a 65 percent probability. But we have a 20 percent probability to the good case. That was 12 percent for the whole year. But again, from current levels we're talking about 20 plus percent kind of returns. So, fairly attractive returns from today for equities."
(Piloting Through: Why Investors Should Stay the Course dated 01/25/2022 interview of Sharmin Mossavar-Rahmani, Head, Investment Strategy Group & Chief Investment Officer, Consumer and Wealth Management, with Goldman Sachs)
Full podcast and transcript can be found here: https://www.goldmansachs.com/insights/podcasts/episodes/02-01-2022-sharmin-mossavar-rahmani.html