Investors should be buying more U.S. assets — particularly bonds, stocks and dollar-denominated assets — as part of their core portfolios, the chief investment officer of Goldman Sachs Private Wealth Management told CNBC Tuesday.
There could be “some good momentum and even some upside” in U.S. equities, said Sharmin Mossavar-Rahmani.
“If we look at the market multiples you could argue that they are a little bit cheap,” she said. “We ended the year at about 13 times earnings. The average is 16. We don’t even have to get to 16 to get pretty good robust earnings.”
The U.S. dollar is also very cheap compared with other currencies, said the Goldman Sachsexecutive, but she believes there can be a 10 percent appreciation in the dollar's value four or five years down the road.
Optimism pervades Goldman Sachs' most recent 2012 outlook, and Mossavar-Rahmani predicted Europe is close to ending its financial crisis.
“We think we are nearing a solution to the restructuring of Greek debt, which we think is very important,” she said.
“But it looks to us like European equities are already discounting a lot of bad news,” she added. “Typically, European equities trade at about a 30 percent discount to U.S. equities; they’re now at a 50 percent discount. And when you look at the major multinational companies in Europe, these are world-class brands” in such sectors as luxury consumer, automobile, and energy.
“If one can buy them at such a discount, to us it seems an allocation to European equities at this point makes a lot of sense,” she said.