David Solomon, chief executive officer of Goldman Sachs, speaks during the Milken Institute Global Conference in Beverly Hills, April 29, 2019.

Patrick T. Fallon | Bloomberg | Getty Images

Investors shouldn’t expect the bull run in stocks and other assets to continue at current levels, according to Goldman Sachs CEO David Solomon.

Equities are on track to enjoy three straight years of double-digit returns, as measured by the S&P 500, thanks in part to the extraordinary support provided by the Federal Reserve and other central banks at the onset of the coronavirus pandemic. That boom has spilled over into other assets, including real estate, art and cryptocurrencies.

“We would expect that we’re not going to see the same rate of returns in equities and many other assets over the next few years that we’ve seen over the last couple of years,” Solomon said Tuesday in response to a question from Joe Kernen on CNBC’s “Squawk Box.”

“I’m not a believer that double-digit equity returns compounding in perpetuity is something as an investor you should expect,” Solomon said. “I’ve been involved with a number of investment committees and charitable foundations, college boards, etc., and certainly my mindset is the returns we’ve received over the last three to five years are different than what we should expect as we go forward.”

Solomon, who leads one of the world’s premier global investment banks, was asked to weigh in on a slew of topics from inflation to bitcoin, China and the return to office work.

While banks have rebounded from concerns last year that the pandemic would crimp revenue, Solomon said that he still felt shares of Goldman were relatively undervalued. Goldman’s stock has surged about 48% this year, but Solomon said the industry suffers from the perception that bank earnings are more volatile than they are.

“Like any other CEO, you know, I think that my company and my stock is underappreciated and undervalued,” Solomon said. “I think the earnings power of the traditional financial services sector is quite powerful, and we get very, very low multiple on those earnings.”

As for the valuation of fintech competitors, Solomon said it was a “mixed bag” where winners are reasonably valued, and others will ultimately be acquired or shuttered.

Solomon said that while he doesn’t personally own bitcoin or ethereum, he wants to allow clients to speculate on it if they want to.

Of greater importance to Goldman than crypto is the larger shift to delivering financial services via digital channels, he said. The company’s retail and corporate banking efforts under Solomon have focused on clean-sheet attempts to break into new businesses for the investment bank, including the announcement of a cloud offering for Wall Street firms.

“I’m a big believer in the digitization that is occurring and the disruption that’s occurring in the way financial services are delivered,” Solomon said. “It’s a massive shift.

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