Goldman Sachs Believes that you can make money in a boring market.
Making money in a low volatility environment is tough, even for Goldman Sachs. When the market is devoid of price swings, opportunities to capitalize on inefficiencies can be few and far between.
Luckily, #Goldman recognizes all of this and has a few ideas to help traders navigate these stagnant times.
First and foremost, investors should be looking to buy stocks. The S&P 500 in particular has seen large risk-adjusted returns relative to other asset classes in low-volatility periods since 1990.
Also, stocks see the biggest improvement in risk-adjusted performance relative to history when price swings are muted. By this measure, non-US equities are actually the biggest winners. This is especially so in emerging-market, European and Japanese stocks.