U.S. stocks are expensive, but Goldman Sachs says investors should keep buying them

The U.S. stock market is trading at eye-watering valuations after two straight big years for the S & P 500 . But that’s not a good enough reason to back away from domestic companies, according to Goldman Sachs’ Investment Strategy Group. The 2025 outlook for the unit, released Monday, included a model portfolio for moderate risk investors that recommended staying overweight U.S. equities, while trimming exposure to foreign stocks to add some diversification through alternatives, like private equity. The S & P 500 trades at a price-earnings ratio of 27.49, according to FactSet. By comparison, the iShares Core MSCI International Developed Markets ETF (IDEV) is at 15.32, while iShares MSCI Emerging Markets ETF (EEM) is at 14.49. Goldman ISG isn’t denying that the U.S. market is expensive, but is instead taking the stance that 2025 won’t be the year that becomes a problem.