Investors should continue to position themselves defensively going into 2023 as the stock market hasn't yet hit its trough, according to a team of strategists at Goldman Sachs. "We remain relatively defensive for the 3 [month] horizon with further headwinds from rising real yields likely and lingering growth uncertainty," the team including Christian Mueller-Glissmann and Cecilia Mariotti said in a note to clients.
"We are looking for lower valuations, a trough in negative growth momentum and a peak in interest rates before a new bull market starts," they said. "We expect markets to transition to a 'Hope' phase at some point in 2023 but from a lower level." The Wall Street firm set its year-end 2023 target at 4,000 on the S & P 500, just below its Friday's close of 4,026.12.
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