So Goldman Sachs just dropped some news that’s basically the financial equivalent of “we’re not in Kansas anymore.” Their big-brain strategists are saying we’ve entered what they’re calling a “postmodern” market cycle—which sounds like something you’d study in a pretentious art class, but it’s actually the fourth major market shift since World War II.
Here’s the deal: Remember how every previous market boom started with stocks being dirt cheap? Yeah, well, this time we’re starting from historically expensive levels. It’s like trying to find a good deal at a luxury mall during Black Friday—technically possible, but you’re gonna pay premium prices.
The Goldman crew identified three things that make this cycle different from the “good old days”:
First, everything’s already expensive. The S&P 500’s price-to-earnings ratio is sitting pretty at historic highs. Translation: stocks are priced like they’re already expecting miracles to happen. So don’t expect the same massive returns your parents bragged about from the ’90s.
Second, inflation and interest rates are being stubborn. Unlike the past two super cycles where rates generally went down (making everything cheaper to buy), this time they’re likely staying higher. Thanks, tariffs and government spending! It’s like the economy decided to be that friend who always wants to split the check evenly, even when they ordered the lobster.
Third, the government’s debt situation is… let’s call it “ambitious.” We’re not in those magical Clinton-era budget surplus days anymore. The government is basically that friend who keeps saying they’ll pay you back next week, except it’s been several trillion dollars and counting.
But before you stuff your money under a mattress, Goldman actually sees some bright spots. They’ve identified three “mega trends” that could still make you money:
Tech isn’t going anywhere. AI is still the cool kid everyone wants to hang out with, and companies are throwing money at it like it’s the last concert ticket on Earth. The tech boom has more room to run, especially as AI starts actually doing useful stuff beyond writing questionable poetry.
Manufacturing and services are getting a glow-up. Here’s where it gets interesting—all that virtual AI magic needs real-world infrastructure. Data centers don’t build themselves, and someone’s got to keep the lights on for all those servers. It’s like the digital world finally realized it needs the physical world to actually work.
Look beyond America. While the US will probably keep leading the pack, there are deals to be found elsewhere. International markets are trading at cheaper valuations—think of it as shopping at the outlet mall instead of the flagship store.
The bottom line? We’re in uncharted territory where the old playbook doesn’t quite work, but that doesn’t mean there aren’t opportunities. It just means you might need to be a bit more creative about finding them. Kind of like dating in your 30s—the rules have changed, but people are still finding love (and returns).
Goldman’s advice boils down to: stay diversified, don’t put all your eggs in the US basket, and remember that tech and infrastructure are still your friends. Just don’t expect the easy money of previous decades—this market’s making you work for it.