(This story is for CNBC Pro subscribers only.) Goldman Sachs' chief equity strategist warned investors about getting too excited about the recent rally in stocks. "Risk to the downside is greater than the opportunity to the upside from this point where we stand today," Goldman Sachs chief equity strategist David Kostin told CNBC's "Squawk on the Street" on Tuesday. "There's a little bit at asymmetry in terms of the downside risk towards a level in the S & P 500 of around 2,000, which is down almost 25% and upside of around 10% to a target at the end of the year of 3,000. So that asymmetry is not symmetrical in terms of timing and I think the risk if much further to the downside," Kostin added. With a sharp two-day rebound, the Dow Jones Industrial Average is now up about 22% from its 52-week low of 18,213.65 hit on March 23. The 30-stock average jumped nearly 2,000 points in just two trading sessions this week as investors are soothed by a stabilization or even decline in coronavirus cases in the U.S. The S & P 500 rallied more than 8% this week so far, bouncing 20% from its 52-week low of 2,191.86. The Nasdaq Composite jumped 7.7% week to date, now 19% up from its 52-week low of 6,631.42 also hit on March 23. While many investors are calling a bottom to the coronavirus bear market, Kostin called upon head-fake rallies during the recovery from the financial crisis as evidence this uptick in equities may be short-lived. "I would just remind you that in 2008 in the fourth quarter there were many different rallies, I call them bear market rallies, some of which almost 20% a couple of times — but the market did not bottom until March of 2009," Kostin expounded. To be sure, Kostin said there are a fair amount of positive developments in recent weeks that are right to ease investors' fears. The Federal Reserve intervened "in a very powerful way," addressing concerns and solvency and liquidity. Additionally, the federal government addressed the revenue replacement issue with its historic $2.3 trillion stimulus bill. "We've had this evolution in a reduction of risk and people are certainly excited," said Kostin. Investment ideas In the next three to six months, Kostin is thinking defensively when it comes to equities. "The two approaches I think about are margin of safety and income at this juncture," he said. Margin of safety incorporates forwarding looking earnings. (For more on Goldman's margin of safety strategy with stock picks, read here .) "We look at earnings from next year, as I said before, looking ahead to 2021, and cut those by 20%. We'll have a haircut of 20% and then we ask ourselves, how are those stocks trading today on that discounted earnings, haircut earnings, compared with March of 2009. We know by definition that March of 2009 was a low, to see what are some stocks trading at today on these discounted forward earnings with where we were at a low." The second approach is on the dividend side, given low treasury yields. "Where are some stocks where we feel confident companies will be able to pay a dividend," said Kostin.
