Goldman Sachs: Wait for these 4 signs that the market has hit its bottom before you buy stocks — and keep your money in these 4 other places in the meantime

• Goldman Sachs expects stocks to be flat in 2023 as growth weakens and interest rates stay high.
• Investors should wait to buy stocks and instead watch for these four signs to materialize.
• Here’s how to position your portfolio heading into the new year, according to the firm.

Stocks have been crushed this year, and Goldman Sachs doesn’t see a rebound on the horizon. In fact, the firm is calling for flat returns in the next year as earnings growth weakens.

Investors should remain defensive in December and in the first few months of 2023 since risks to earnings and growth still loom, a dozen Goldman Sachs researchers led by Christian Mueller-Glissmann, the firm’s head of asset allocation research, wrote in a late November note.

Global business activity is slumping as higher interest rates and capital costs make borrowing more expensive. Additionally, rising real yields mean that bonds are now a legitimate alternative to stocks, which has catalyzed a “major valuation reset” for stocks, Mueller-Glissmann wrote.