And they blame the 'fiscal cliff.'

"We assign a low probability that Congress addresses the ‘fiscal cliff’ in a benign fashion prior to year-end 2012," writes David Kostin in a new note to clients. "The likelihood is perhaps as low as 1 in 3 depending on the election outcome. We expect it will be resolved in January but the uncertainty will prompt a P/E contraction towards year-end."

In recent weeks, Goldman's conversation with clients suggest that around 90 percent of investors think Congress will soon reach a compromise on the impending 'fiscal cliff.'