New York — After a year of impressive gains, global financial markets may be gearing up for a period of correction, according to leading investment experts. Executives from Goldman Sachs and Morgan Stanley warned that a market pullback, potentially ranging from 10 to 20 percent, could occur within the next two years as investors reassess their positions.

Global stock indices have surged to record levels this year, buoyed by advancements in artificial intelligence and optimistic forecasts of interest rate cuts. Numerous major U.S. indexes have hit new highs, while Asian markets like Japan’s Nikkei 225 and South Korea’s Kospi have also reached significant milestones. China’s Shanghai Composite Index, too, has enjoyed a resurgence, buoyed by easing geopolitical tensions and a favorable dollar.

Goldman Sachs CEO David Solomon addressed these market trends during a recent investment summit in Hong Kong, indicating that such corrections are a normal aspect of longer-term market cycles. “Over the next 12 to 24 months, it’s likely we will see a drawdown,” he said. Solomon emphasized that these fluctuations shouldn’t deter investors; instead, they should stay the course and adjust their portfolio allocations as needed.

Morgan Stanley’s CEO, Ted Pick, echoed this sentiment, suggesting that periodic pullbacks should be embraced rather than feared. He described such adjustments as healthy occurrences rather than indicators of impending crises. “We should also welcome the possibility of 10 to 15 percent corrections that aren’t triggered by external economic shocks,” Pick noted.

These insights come in light of recent statements from the International Monetary Fund, which warned of the increasing likelihood of a sharp market correction. Additionally, voices from the Federal Reserve and the Bank of England have expressed concerns about inflated stock values.

Despite potential challenges on the horizon, both Goldman Sachs and Morgan Stanley have identified Asia as a region ripe for investment opportunities. Solomon expressed optimism regarding continued interest in China, highlighting its importance as a major global economy.

Pick pointed to unique growth narratives in Hong Kong, Japan, and India, commending the recent corporate governance reforms in Japan and infrastructure developments in India as compelling long-term investment themes. “It’s hard not to be excited about the stories unfolding in these diverse markets,” he stated, emphasizing sectors such as artificial intelligence, electric vehicles, and biotechnology in China as areas to watch.

As investors navigate this complex landscape, experts suggest that staying informed and adaptable will be crucial in maximizing opportunities while mitigating risks.