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Goldman Sachs CEO Solomon: Many Markets Look Frothy

'I’m not a believer that double-digit equity returns compounding in perpetuity is something as an investor you should expect,' Goldman Sachs's CEO says.
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You can add Goldman Sachs CEO David Solomon to the list of investment luminaries warning that markets from stocks to art are getting frothy.

“We would expect that we’re not going to see the same rate of returns in equities and many other assets over the next few years that we’ve seen over the last couple of years,” Solomon told CNBC Tuesday

“I’m not a believer that double-digit equity returns compounding in perpetuity is something as an investor you should expect.

“I’ve been involved with a number of investment committees and charitable foundations, college boards, etc. Certainly my mindset is the returns we’ve received over the last three to five years are different than what we should expect as we go forward.”

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The S&P 500 index so far this year has returned 24% including dividends, 26% over the past 12 months, 22% annualized over the past three years and 18% annualized over the past five years.

Meanwhile, Bank of America has compiled a list of its favorite inflation-protected exchange-traded funds, as it expects U.S. consumer-price increases to register 4.6% next year.

The funds are “buy-rated ETFs with above-market dividends and high exposure to inflation-protected sectors,” BofA analysts wrote in a commentary.

The group includes Energy Select Sector SPDR Fund  (XLE) - Get Energy Select Sector SPDR Fund Report, iShares Core High Dividend ETF  (HDV) - Get iShares Core High Dividend ETF Report, Schwab US Dividend Equity ETF  (SCHD) - Get Schwab US Dividend Equity ETF Report, Vanguard High Dividend Yield ETF  (VYM) - Get Vanguard High Dividend Yield Index ETF Report, Vanguard Value ETF  (VTV) - Get Vanguard Value ETF Report, Vanguard Financials  (VFH) - Get Vanguard Financials ETF Report;

Real Estate Select Sector SPDR Fund  (XLRE) - Get Real Estate Select Sector SPDR Fund Report, SPDR S&P Bank ETF  (KBE) - Get SPDR S&P Bank ETF Report, SPDR Portfolio S&P 500 Value ETF  (SPYV) - Get SPDR Portfolio S&P 500 Value ETF Report, Schwab Fundamental U.S. Large Company Index ETF  (FNDX) - Get Schwab Fundamental US Large Co. Index ETF Report, and Vanguard Small-Cap Value ETF  (VBR) - Get Vanguard Small Cap Value ETF Report.