A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Aug. 21, 2017.

Goldman Sachs has mixed confidence about next year's market and is warning investors to protect themselves with "high quality" stocks, as many clients are telling the firm that a U.S. economic recession is coming as soon as 2020.

"Investors should increase portfolio defensiveness given our forecast for heightened risk and fat tails," Goldman Sachs analyst David Kostin said in a note on Friday.

A fat tail is a way Wall Street describes a larger than usual amount of risk. Goldman Sachs expects the will reach 3,000 by the end of next year, from about 2,600 this week. The firm assigns a 50 percent probability to that baseline scenario. But Goldman sees a 30 percent probability for its downside 2019 forecast of 2,500 and a 20 percent probability for its upside forecast of 3,400.