A Taylor Swift song is the best investment advice for 2024, Goldman Sachs says

• Goldman Sachs recommended investors channel their inner Taylor Swift when planning for 2024.
• The bank said investors would do well to "follow Taylor Swift's advice in the song from her 1989 album: 'All You Had To Do Was Stay' - invested."
• Goldman Sachs expects the S&P 500 to rise next year, ending 2024 at 4,700.

Investors would do well to channel their inner Taylor Swift and stay in the stock market next year, according to a Wednesday note from Goldman Sachs.

"At this time next year, portfolio managers will look back and realize the best investment strategy for 2024 was to follow Taylor Swift's advice in the song from her 1989 album: 'All You Had To Do Was Stay' – invested," chief US equity strategist David Kostin wrote.

His advice stems from Goldman Sachs' outlook that the S&P 500 will deliver a respectable 6% total return in 2024, with the index likely ending the year at 4,700.

This isn't the first time Swift has occupied the head space of Wall Street forecasters and economists this year. The singer's immensely successful Eras tour was highlighted in the Federal Reserve's beige book as one reason why hotels in Philadelphia saw a record surge in revenue over the summer.

On Wednesday, Goldman Sachs also pointed to the expansive economic impact of the Taylor Swift effect.

"The launch of singer-songwriter Taylor Swift's 'Eras' tour represented one of the most notable cultural events of 2023. Global ticket sales are estimated to exceed $1 billion. The tour's economic multiplier effect is significant," Kostin said.

The Eras tour is scheduled to end in late November 2024, "roughly corresponding to the 12-month horizon of the market forecast in this report," he added.

Kostin's investment recommendation to stay invested in stocks for the next year is based on the expectations that US GDP will grow 2.1% in 2024, profit margins remain stable, equity valuations float in "fairly valued" territory, and the Fed ends its interest rate hiking cycle.

That should all translate into continued positive performance from the mega-cap tech stocks, dubbed the "Magnificent Seven," which include Apple, Alphabet, Amazon, Microsoft, Nvidia, Meta, and Tesla.

"The stocks should collectively outperform the remainder of the index in 2024. The seven stocks have faster expected sales growth, higher margins, a greater re-investment ratio, and stronger balance sheets than the other 493 stocks and trade at a relative valuation in line with recent averages after accounting for expected growth," Kostin said.

And all of this translates into the idea that investors should stay the course and own stocks throughout next year, despite concerns of a potential recession.

"As homage to the global icon, our 2024 US Equity Outlook is subtitled 'All You Had To Do Was Stay' – invested. The title of the song from Taylor Swift's 1989 album reflects our baseline forecast that despite intermittent volatility, fund managers will ultimately be rewarded for staying invested through the end of next year," Kostin said.