1Goldman Sachs Global Investment Research. Global Economics Comment: Is the World Deglobalizing, Slowbalizing or Newbalizing? As of April 18, 2022.
2Ramey, G., and V. Ramey, 1995, “Cross-Country Evidence on the Link between Volatility and Growth”, American Economic Review, 85, 1138-1151, and Shediac, R., C. Haddad, and S. Ghazaly, 2011, “Resilient, Stable, Sustainable: The Benefits of Economic Diversification”, Strategy&, Formerly Booz & Company.
Risk Assets are those with a high degree of risk and volatility, such as such as equities, high-yield credit, commodities and currencies.
All investing is subject to risk, including the possible loss of the money you invest. Equity securities are more volatile than bonds and subject to greater risks.
Investments in foreign securities entail special risks such as currency, political, economic, and market risks. These risks are heightened in emerging markets.
Investments in commodities may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry or commodity.
Private equity investments are speculative, highly illiquid, involve a high degree of risk, have high fees and expenses that could reduce returns, and subject to the possibility of partial or total loss of fund capital; they are, therefore, intended for experienced and sophisticated long-term investors who can accept such risks.
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Alternative Investments often engage in leverage and other investment practices that are extremely speculative and involve a high degree of risk. Such practices may increase the volatility of performance and the risk of investment loss, including the loss of the entire amount that is invested. There may be conflicts of interest relating to the Alternative Investment and its service providers, including Goldman Sachs and its affiliates. Similarly, interests in an Alternative Investment are highly illiquid and generally are not transferable without the consent of the sponsor, and applicable securities and tax laws will limit transfers.
High-yield, lower-rated securities involve greater price volatility and present greater credit risks than higher-rated fixed income securities.
The currency market affords investors a substantial degree of leverage. This leverage presents the potential for substantial profits but also entails a high degree of risk including the risk that losses may be similarly substantial. Such transactions are considered suitable only for investors who are experienced in transactions of that kind. Currency fluctuations will also affect the value of an investment.
Diversification does not protect an investor from market risk and does not ensure a profit.
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Date of First Use: July 2022