Imagine you could own a tiny slice of everything – every stock, bond, gold bar, even Bitcoin.
That’s what Goldman Sachs tried to model.
Their “perfect portfolio” looked great on paper… until a humble 60/40 strategy came along with better returns and lower risk.
Yup. The world’s biggest investment bank just tried to build the ultimate market portfolio – basically, a basket of every investable asset on Earth – and discovered it’s… not that great.
In a new report called “Investing in Everything, Everywhere, All at Once” (yes, that’s the real title), Goldman Sachs’ Christian Mueller-Glissmann and team tried to map out what the global “market portfolio” actually looks like – and how it’s performed over time.
They started with all the usual suspects: stocks, bonds, and gold. Add up their total market values, and you get about US$247 trillion worth of investable assets. According to Goldman, this mix has returned 7.8% a year since 1950 – about 4% above inflation.
Then, the analysts expanded the universe: they added credit, real estate, municipal bonds, inflation-linked bonds, and even crypto. (Because of course they did.)
That extra ~US$14 trillion reduced the dominance of equities a bit – but the result was a more realistic snapshot of how all global assets actually move together.
This “World Portfolio”, as Goldman calls it, earned 6.4% a year since 1990, or 3.7% after inflation. Decent – until you realise a plain-vanilla 60/40 portfolio (stocks/bonds) did better.
The twist? Even though the World Portfolio included all assets (theoretically the “perfect benchmark”), it still wasn’t efficient. Gold’s wild price swings dragged down the risk-adjusted returns, while stocks – especially US ones – carried most of the heavy lifting.
So much for the Nobel-approved idea of the “market portfolio” being unbeatable.
This is one of those rare moments where theory and reality have an awkward argument in public.
On paper, owning “everything” should be the safest bet – you’re perfectly diversified, riding the global economy as it grows.
But in practice, the market portfolio reflects what exists, not what’s smart. If more money sits in overvalued US tech stocks or underperforming gold, your “perfect” portfolio inherits all those structural biases.
In other words: diversification doesn’t protect you from dumb assets – it just ensures you own them all equally.
Goldman’s takeaway? Even the “World Portfolio” underperformed because the world itself isn’t perfectly balanced. Economic regimes, inflation cycles, and policy trends matter more than any model.
And while Goldman still recommends tilting toward gold (for inflation protection) and US tech stocks (for growth), it’s not exactly a bold contrarian stance – it’s what everyone’s already doing.
Most Singaporean investors already lean “global” by default.
And yet, Goldman’s findings suggest that blindly following the global mix might not be the smartest move. Why? Because global markets today are heavily concentrated – US equities alone make up over 60% of global market cap, and tech giants (Apple, Microsoft, NVIDIA, etc.) dominate those returns.
So when you buy “the world”, you’re actually buying a lot of America – and a handful of mega-cap tech stocks at that.
For a Singaporean investor, that creates 3 practical challenges:
Hidden concentration risk.
If you’re dollar-cost averaging into S&P 500 or global equity funds, you’re more exposed to the US economy – and its high valuations – than you think. A simple way to rebalance? Add some Asia-focused or emerging market exposure. Temasek and GIC already do this quietly.
The gold dilemma.
Gold hasn’t been great on a risk-adjusted basis, but it still shines in inflationary or volatile periods. For Singaporeans, holding a small slice (say 5%) of gold – whether through an ETF like SPDR Gold Shares – can be a decent inflation hedge, especially when global inflation surprises on the upside.
Rethink your bond strategy.
Goldman underweighted fixed income, citing rising debt levels and inflation. For us, that means the classic “60/40” allocation might need tweaking – but not abandoning. Singapore government bonds, T-bills, or SGD money market funds still play a crucial role in stabilising portfolios and earning 2% to 3% yields.
Ultimately, the best “world portfolio” for Singaporeans might look more like:
- 50% to 60% global equities (diversified beyond just US tech),
- 25% to 35% bonds or cash-like assets in SGD,
- and 5–10% in real assets like gold, REITs, or even CPF OA (which acts like a guaranteed bond substitute).
The point isn’t to copy Goldman or chase “optimal” returns – it’s to build a mix that fits your life, goals, and risk.
A portfolio that helps you sleep well, not just look smart on paper.
The irony of Goldman’s “World Portfolio” experiment is that it proves the world’s biggest investors wrestle with the same thing we do – there’s no such thing as a perfect portfolio.
Owning “everything” sounds smart until you realise the world itself is unbalanced. Too much of it sits in expensive US tech, too little in undervalued regions, and gold… well, gold mostly shines when everything else burns.
Goldman’s takeaway wasn’t “just buy the index.” It was more like:
“Start from the market, then lean where the wind’s blowing.”
Right now, they believe that means:
- A modest overweight in equities, especially US tech, because it’s still the world’s growth engine.
- And an underweight in bonds, given that debt, inflation, and policy risks could make the old 60/40 playbook less reliable.
For us in Singapore, that’s not a cue to copy-paste Goldman’s playbook – it’s a reminder to think structurally, not historically. What worked in the last decade (low inflation, easy money, tech boom) might not work in the next one.
The “World Portfolio” might have flopped on paper, but it leaves us with one timeless truth:
Investing isn’t about owning everything. It’s about owning the right things at the right time.
Which is what I’ve always believed in when investing for myself and my clients.
Stay curious, stay informed, and stay invested – the world won’t stop changing, but that’s exactly where your next opportunity hides.