Goldman advertises stable stocks for this market; here is their rebalanced portfolio

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Investors need to hold stable stocks as they fight tighter monetary policy and slower growth, says Goldman Sachs strategist David Costin.

“Companies with low share price volatility and steady earnings growth need to outperform uncertain macro, “Costin and team wrote in a note.” Our high-sharpness basket, which we balance in this report, also takes into account volatility, but maximizes future risk-adjusted returns. “

Sharpe’s forecast ratio is the return on the consensus 12-month price target divided by the 6-month volatility implied by options.

“The strategy has a high percentage of superiority,” Costin said. “The average value of the shares is expected to generate twice the return on the average S&P 500 (SP500) (NYSEARCA:Spy) shares with only slightly higher default volatility. “

“At the sector level, the average stock of communications services has the highest potential Sharpe ratio (1.2), while the average stock of energy has the lowest (0.6),” he said.

The basket is lower by 18% so far compared to -22% for the medium-sized mutual fund with a large capitalization, it was almost a complete overhaul with 42 new entrants.

Stocks by sectors with new participants marked with an asterisk are:

communication services (XLC)

  1. Dish Network (knowing) *, expected return / default volatility 2.4
  2. Disney (DIS) *, 1.7
  3. Netflix (NFLX) *, 1.4
  4. alphabet (GOOGL) *, 1.4
  5. Omnicom (OMC) *, 1.4

Consumer judgment (XLY)

  1. Royal Caribbean (RCL) *, 1.9
  2. carnival (CCL) *, 1.8
  3. Expedia (EXPE) *, 1.8
  4. MGM Resorts (MGM) *, 1.7
  5. GM (GM) *, 1.7

Consumer goods (XLP)

  1. Walmart (COM)WMT), 1.1
  2. Mondelez (COM)MDLZ) *, 1
  3. P&G (PG) *, 0.9

Energy (XLE)

  1. ONEOK (COM)OK) *, 0.9
  2. Williams companies (WMB) *, 0.7
  3. Petroleum Marathon (MPC) *, 0.7

Finance (XLF)

  1. Intercontinental exchange (ICE) *, 1.5
  2. Bank of America (BAC) *, 1.5
  3. Wales Fargo (WFC) *, 1.4
  4. Capital one (croaking), 1.4
  5. Synchrony Financial (SYF) *, 1.4

Healthcare (XLV)

  1. DexCom (DXCM) *, 1.7
  2. Zoetis (gsz) *, 1.7
  3. IDEXX (IDXX) *, 1.7
  4. Illuminati (ILMN) *, 1.6
  5. Intuitive surgery (ISRG) *, 1.6
  6. Bio-Techno (TECH) *, 1.5
  7. Technology alignment (ALGN) *, 1.5

Industries (XIl)

  1. Alaska Air Group (ALK), 1.9
  2. Ametek (matrix) *, 1.6
  3. Delta Air Lines (sprouts), 1.5
  4. Copart (CPRT) *, 1.5

Info Tech (XLK)

  1. micron (I hit) *, 2.0
  2. Zebra Technologies (the empty) *, 1.6
  3. Trimble (TRMB) *, 1.6
  4. Skyworks Solutions (SWKS), 1.6
  5. Qualcomm (QCOM) *, 1.6
  6. Global payments (GPN) *, 1.6
  7. Microsoft (IFFT) *, 1.4
  8. Application materials (AMAT) *, 1.4
  9. Motorola (MSI) *, 1.3
  10. Salesforce (CRM), 1.3
  11. Autodesk (ADSK) *, 1.3
  12. Nvidia (NVDA) *, 1.3
  13. Accenture (ACN), 1.3

materials (XLB)

  1. Volcano (VMC) *, 1.5

Property (XLRE)

  1. Simon Property Group (SPG) *, 1.5
  2. prologue (PLD) *, 1.5

Utilities (XLU)

  1. Public service group (RING) *, 1.2
  2. AES (AES), 1.2

Some of the above stocks also appear on Wells Fargo’s latest list names to abbreviate or avoid.

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