Ankara: The CEOs of US investment banks Morgan Stanley and Goldman Sachs warned investors Tuesday about a possible 10% to 20% market correction in equity markets in the next two years.

According to Anadolu Agency, Goldman Sachs CEO David Solomon, speaking at the Global Financial Leaders' Investment Summit in Hong Kong, stated, 'It's likely there'll be a 10 to 20% drawdown in equity markets sometime in the next 12 to 24 months.' He explained that such reversals are typical characteristics of long-term bull markets and advised investors to remain invested and reassess their portfolio allocations instead of attempting to time the market.

Solomon elaborated that a 10 to 15% drawdown is a frequent occurrence, even during positive market cycles, and should not alter the fundamental or structural beliefs regarding capital allocation.

Morgan Stanley CEO Ted Pick echoed similar sentiments, encouraging investors to view sporadic declines as constructive rather than crisis indicators. He emphasized the importance of recognizing drawdowns of 10 to 15% as normal market behaviors that are not necessarily triggered by significant macroeconomic events.

These insights from Solomon and Pick align with recent warnings from the International Monetary Fund about a potential steep correction, alongside cautionary statements regarding elevated market valuations from Bank of England Governor Andrew Bailey and US Federal Reserve Chair Jerome Powell.