Goldman Sachs told clients the market will be volatile the rest of the year, but there are still investment strategies that can outperform in the uncertainty.
The firm's year-end S&P 500 target is 2,100, representing less than 1 percent upside from Tuesday's close. However, there is downside risk of 5 to 10 percent in the short term due to geopolitical events, according to Goldman's chief U.S. equity strategist, David Kostin.
"The coming months will see a continuation of the recent slow growth, low interest rate environment along with a rise in uncertainty stemming from Brexit and the November elections," Kostin wrote in a note to clients Tuesday. "In this environment, defensive strategies focused on income, risk-adjusted returns and U.S. relative strength should outperform."
Kostin recommended three strategies where investors can hide out during the potential turmoil and generate returns.