Investors might be forgiven for thinking nothing much happened last week except for the Budget – though, as it was, Chancellor George Osborne’s third effort was largely neutral for them. Arguably more interesting was a report from Goldman Sachs strategists Peter Oppenheimer and Matthieu Walterspiler, whose The long good buy – the case for equities argues investors are seeing a once-in-a-generation opportunity to buy into shares and should be bidding a ‘long goodbye’ to bonds.

Of course, given its recent history, some have quite rightly questioned why they should believe anything emanating from Goldman Sachs yet the report does contain some interesting insights. Oppenheimer and Walterspiler base much of their argument on valuation, arguing the bursting of the technology bubble and the credit crisis have contributed to the undermining of confidence in equities. This means the risk premium for equities now looks unreasonably high, particularly relative to bonds.

Although the pair admit slower earnings are a concern, they believe this and other worries such as tighter credit have been overstated. Margins should be supported by tighter compensation control and advances in technology, says the report. The pair also argue the opposite case for bonds, suggesting that, after a 10-year bull run in the asset class, valuations now look stretched. This is particularly true if there is any meaningful recovery in global growth, during which investors are unlikely to continue to seek out the protective haven of bonds.

The report should give some solace to investors who are currently watching the FTSE 100 making heavy weather of passing the 6,000 mark and wondering if it can make the final push. Shares have had a strong run since 2009 – though admittedly from extremely low levels – leaving investors nervous as to whether any value remains in the market.

As the report states, the real worry is not – as many believe – the eurozone crisis and any resulting recession, but whether earnings can be sustained at current levels. Companies have done a good job of refinancing, paying down debt and tightening up their margins. However, that can only continue to deliver improvements for so long. At some point they will need to spend their cash piles and reinvest to deliver growth.

Goldman Sachs remains the most bullish of the investment banks although others, such as Credit Suisse, have recently upgraded their year-end forecast for markets. Equity markets are still jumpy and economic data remains volatile. As a result, any upward movement in equity markets is unlikely to be linear.