Investors are behaving more ’emotionally’ now than they were during COVID or the financial crisis, says Goldman Sachs CIO

Eleanor Pringle

<ul>
<li>Goldman Sachs executive Sharmin Mossavar-Rahmani believes political bias is distorting investors&#8217; perceptions of economic risk, particularly under Donald Trump&#8217;s administration, leading some clients to let emotions override sound investment strategy. </li>
</ul>



Donald Trump has injected a fair amount of uncertainty into the economic outlook, but a Goldman Sachs investment executive believes this is having a disproportionate impact on investors&#8217; confidence, given their political bias.<div class="paywall-selector"></div><div class="paywall">



Sharmin Mossavar-Rahmani, head of the Investment Strategy Group (ISG) and chief investment officer of Goldman Sachs Wealth Management, told Fortune&#8217;s <a href="https://conferences.fortune.com/event/most-powerful-women-international-2025/agenda">Most Powerful Women International summit</a> in Riyadh this week that some clients are letting the politics bleed into portfolios. 



She says this habit may allow individuals to <a href="https://fortune.com/2025/05/19/addictive-tariffs-here-to-stay-wharton-professor/" target="_blank" rel="noopener">succumb to the &#8220;noise&#8221;</a> instead of maintaining a clear, long-term strategy to maximize asset return.



Part of defining that strategy comes down to the work of Goldman&#8217;s team, she said: &#8220;As you&#8217;re thinking about investments how do you make sure that all the noise, all the headlines, all that clutter doesn&#8217;t actually distort one&#8217;s view of what are the best investment recommendations we have to make?&nbsp;



&#8220;What we have noticed is people&#8217;s interpretation of this administration is driven by people&#8217;s personal political biases.&nbsp;So for example, if somebody is very democratic &#8230; they tend to think there&#8217;s nothing that this administration is doing that is acceptable, and they actually say, &#8216;We need to liquidate because we don&#8217;t think things are going to go so well.&nbsp;



&#8220;If you happen to be Republican, they say maybe [Trump] doesn&#8217;t deliver the messages in the best way possible, but the points are all very valid, and that&#8217;s what one has to focus on.&#8221; 



Mossavar-Rahmani&#8217;s experience tracks with data compiled by the likes of Pew Research. 



In February, <a href="https://www.pewresearch.org/short-reads/2025/02/11/republicans-think-economy-will-improve-over-the-next-year-democrats-expect-it-to-get-worse/">a Pew study</a> found that, on average, four in 10 Americans were optimistic about the economy, and they were overwhelmingly Republican or Republican-leaning.



Only 10% of Democrats expected the economy to improve in the coming 12 months, with 64% saying they expected it to get worse. 



&#8220;You see the same thing regionally,&#8221; Mossavar-Rahmani added. &#8220;If people are, for example, based in Europe—especially in the major countries [like] Germany—they find that some of the things the U.S. president says are not appropriate or offensive. They don&#8217;t like the issue of being put under pressure to contribute to NATO defense expenses, even if the point the president is raising is legitimate and it&#8217;s a point that pretty much every U.S. president since John Kennedy in 1963 has raised.&#8221; 



Even among couples, Mossavar-Rahmani said politics is dividing investment strategy, saying that people&#8217;s reactions are &#8220;different&#8221; to Trump&#8217;s policies, despite the fact that some have been attempted or proposed by previous administrations.



&#8220;The most interesting experiences we have is when it&#8217;s a husband and wife team, and the wife wants to sell all the assets. So definitely human psychology and biases are very important,&#8221; Mossavar-Rahmani added.



While markets have been jumpy, they have reacted less than retail clients.



Mossavar-Rahmani added: <a href="https://fortune.com/2025/05/15/ubs-summer-tariffs-sector-secific-pharma-lumber-copper/">&#8220;Uncertainty today is so much greater</a>. So we think that the emotional response is greater today. The markets though haven&#8217;t quite responded as much. <a href="https://fortune.com/2025/03/11/trumps-tariff-threats-caused-vix-surge-is-it-momentary-spike-start-of-a-global-contagion/?utm_source=search&amp;utm_medium=suggested_search&amp;utm_campaign=search_link_clicks">If you think of VIX, a volatility measure, it&#8217;s not anywhere near</a> as high as it was during the global financial crisis.&#8221;



As such, Mossavar-Rahmani&#8217;s advice was simple: &#8220;Stay curious and try to take emotion out of it,&#8221; she finished.</div>

Sharmin Mossavar-Rahmani, of the Investment Strategy Group (ISG) and Goldman Sachs Wealth Management, says political bias is driving some investors.

Sharmin Mossavar-Rahmani warns against emotional investing in Trump administration

Sharmin Mossavar-Rahmani, Head, Investment Strategy Group and Chief Investment Officer, Wealth Management, Goldman Sachs In conversation with Diane Brady, Fortune, at Fortune Most Powerful Women International in Riyadh, Saudi Arabia

<a href="https://fortune.com/ranking/most-powerful-women/2025/">See who made the 2025 Fortune Most Powerful Women list</a>. The definitive ranking of the women at the top of the global business world tells us both who wields power today and who is poised to climb even higher tomorrow.

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Sharmin Mossavar-Rahmani advised investors against mixing their political inclinations with their portfolios.

Investors are behaving more 'emotionally' now than they were during COVID or the financial crisis, says Goldman Sachs CIO

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