Investors Nervous: Why Stocks May Keep Rising Despite High Market

Goldman Sachs: Stocks Still a Good Investment

Investment bank Goldman Sachs says rapidly rising earnings could keep pushing stock prices higher. Experts recommend using buffer ETFs and dividend stocks to manage risk rather than fleeing equities.

What's Happening in the Market?

Stocks are near all-time highs. High oil prices, persistent inflation fears, and the possibility of Fed rate hikes are making investors nervous. However, Goldman Sachs argues that as long as earnings remain strong, it's not wise to exit the market.

Earnings Continue to Grow

S&P 500 companies saw first-quarter earnings rise more than 28%. Even excluding tech stocks, earnings were up 14%. Greg Calnon, head of public investing at Goldman Sachs Asset Management, said, "Every day we see many risks in the news, but stocks keep grinding higher. It's all about earnings."

Dividend Stocks and Buffer Funds

Goldman Sachs advises investors to reduce risk with dividend-paying stocks and defined outcome funds (buffer funds). These funds cap gains at a certain level and use options to limit downside. Graham Day, president of Innovator ETFs, noted, "Ultra high-net worth clients want more risk management and are willing to give up some upside for more certainty."

Don't Miss the AI Opportunity

Alexandra Wilson-Elizondo, co-chief investment officer at Goldman Sachs Asset Management, said not investing in AI over the past year has been the biggest mistake, adding that investors shouldn't be "freezing" at a time like this.