seevTION | 2017 Financial Markets Outlook: The Horns ot a Dilemma INVESTORS HAVE HAD AN AMAZING BULL RUN. Including last year’s 12% total return, the S&P 500 is nearly 3.5 times as high as its financial crisis trough. The advance has been equally long- lasting, second in length only to the almost-decade-long period that preceded the technology bubble in 2000. These impressive gains are not limited to just equities or US assets. US corporate high yield has gained 177% over the same time span, while the total return of the MSCI All Country World Index excluding the United States has been higher only 5% of the time over comparable eight-year periods since 1994. But as we begin a new year, these gains have left investors on the horns of a dilemma. Put simply, they must now choose to either remain invested at high valuations and bear the associated risk of loss or exit the market and forgo the potential for upside surprises as well as returns that are attractive compared to the alternatives. 48 | Goldman Sachs | yanvarv20ry— HOUSE_OVERSIGHT_014581