This translation has been automatically generated and has not been verified for accuracy.Goldman Sachs’ U.S. equity strategy team led by David Kostin published a three-part investor plan to allow portfolios to benefit from an eventual economic recovery while protecting assets from potential volatility.
The usual cyclical factors that affect the timing and duration of recessions – corporate financial excess and inflation, to name two – are out the window. Instead, “many winners and losers will likely be determined by the ability of businesses to reopen and by the speed of consumer demand normalization.”Smaller companies will bear the brunt of the virus-caused economic slowdown and should be avoided according to Goldman Sachs.
As for cyclical stocks, Goldman points to China’s experience with the COVID-19 lockdown:"The reopening experience in China shows that manufacturing and construction activity will likely recover faster than consumer services,” and because of this “we expect goods-producing cyclical stocks will be the primary beneficiaries of the initial restart [in North America]”