Market Brief: Analyzing the Impact of Tariffs – Goldman Sachs Asset Management

Investing always carries inherent risks, including the possible loss of capital. Equity investments are particularly vulnerable to market risk, which is the fluctuation in the value of securities based on various factors such as economic conditions, sector performance, and individual company prospects. Different investment styles, such as growth or value, may go in and out of favor, leading to potential underperformance compared to similar strategies. Additionally, smaller companies (small or mid-cap) may pose greater risks than larger, more established corporations, with increased price volatility and lower liquidity.

When it comes to fixed-income securities, investors are exposed to risks associated with debt securities in general, which include credit, liquidity, interest rate, prepayment, and extension risks. Bond prices move in the opposite direction of interest rates, so a rise in interest rates can lead to a decline in bond value. Securities with variable or floating interest rates are less affected by interest rate changes compared to fixed-rate securities. However, they may decline in value if interest rates don’t follow predicted trends. Credit risk is higher in high-yield bonds, also known as junk bonds, where the issuer may default on interest and principal payments. Prepayment risk involves the issuer paying off principal sooner than expected, while extension risk refers to delayed payment. Nevertheless, all fixed-income investments may be worth less than the initial cost upon redemption.

Investing in emerging markets carries heightened risks compared to developed markets, including limited liquidity and exposure to various factors like volatile securities markets, adverse exchange rates, and political, economic, or environmental developments. Diversification, while beneficial, doesn’t shield investors from market risk or guarantee profits.

Economic and market forecasts, although informative, are based on assumptions and subject to change without notice. These forecasts don’t consider individual client needs or constraints. Consequently, actual results may differ, and the uncertainty surrounding forecasts can significantly impact performance. Furthermore, emerging data may lead to revised forecasts, highlighting the constantly evolving nature of economic conditions.

It’s essential for prospective investors to familiarize themselves with legal and regulatory requirements pertaining to their citizenship, residence, or domicile. This educational material is not intended as investment advice or an offer to buy or sell securities. Past performance doesn’t guarantee future results, and investment values can fluctuate. Investors are encouraged to consult financial advisors before making investment decisions.

While this material provides general market insights, it’s pivotal to note that it’s not financial research and doesn’t originate from Goldman Sachs Global Investment Research. The opinions expressed may differ from those of other divisions within Goldman Sachs or its affiliates. Investors should seek advice from financial advisors before engaging in securities transactions. Goldman Sachs Asset Management does not offer legal, tax, or accounting advice and recommends consulting appropriate advisors for these matters. While information is sourced from reliable outlets, accuracy isn’t guaranteed. Views expressed herein are for informational purposes and may change with market conditions. Individual portfolio teams at Goldman Sachs Asset Management may hold different opinions and investment strategies.