'All good things must come to an end': Goldman Sachs warns of 'fast pain' bear market

Central bank policy a risk

Goldman Sachs has warned returns across all asset classes are likely to be lower in the medium term as a result of central banks reversing their bond-buying programmes and extreme valuation levels last seen in 1900.

In a note, Christian Mueller-Glissmann, managing director of portfolio strategy and asset allocation at Goldman Sachs International, pointed to the two other occasions when equities, bonds and credit was all similarly expensive: the "Roaring 1920s and the Golden 1950s". "All good things must come to an end," Mueller-Glissmann said, according to Bloomberg. "There will be a bear market eventually." He added central banks had fewer options in the current environment to ease monetary policy in the event of recession, due to low interest rates and large balance sheets. The Federal Reser...