Here's what goldman sachs tells its clients to buy during tough markets

Here's what goldman sachs tells its clients to buy during tough markets

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As the stock market's September decline accelerated Monday, many financial advisors and their clients were likely looking for safer stocks to shift into or buy on a dip. One common


theme among stocks that become popular during downturns is sound fundamentals — that is, the ability for companies to weather a downturn without having to raise more cash and dilute


investors. Goldman Sachs has several baskets of stocks that fit into this theme, and those groups of names are updated periodically to serve as reference points for when the market turns


south. The firm published a note in March detailing its different baskets. The charts below show some of the current constituents for more defensive themes. One of these groups is the


high-quality stock basket. Investors should consider these stocks when they are concerned about the broader economy or market stability, according to Goldman. "In weak or uncertain


macroeconomic environments, investors should place a premium on the stability and safety of these companies," the note said. The high-quality basket is sector neutral, meaning it


includes the highest-rated names in each area. Goldman's current list includes stocks as varied as tech giant Alphabet and discount retailer Dollar Tree . For investors looking to


stabilize or even increase their income from investments during a rocky period, Goldman also has a dividend growth stock basket. To grow dividends during a downturn, a company likely needs


strong fundamentals and cash flow growth. The current group includes Verizon , which was one of the few major stocks that bucked the sell-off and rose Monday. For investors looking to avoid


the worst-case scenarios, Goldman's strong balance sheet group is based on the stocks with the best Altman Z scores, which is a calculation used to estimate the risk of bankruptcy. The


full list of stocks for each baskets shows significant overlap, as many companies have several appealing qualities during a market downturn. Industrial supply company Fastenal , listed in


the strong balance sheet table, actually appears in all three baskets. —CNBC's Michael Bloom contributed to this report.