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Markets Will Drop 7-17% in October: Strategist

Published: Friday, 25 Sep 2009 | 3:21 PM ET

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By: JeeYeon Park
CNBC News Associate

Stocks continued to struggle on Friday. Could this be the beginning of a real market correction? Mike Rubino, president of Rubino Financial, and Paul Schatz, president of Heritage Capital, discussed how investors should position their portfolios for the end of the third quarter.

“I’ve been bullish for a while and over the next year, we’re going higher,” Schatz told CNBC.

“In the interim, the best chance for the first significant correction since the bull leg began in March is coming up early to mid-October."

"It lasts 4 to 6 weeks and we go down 7 to 17 percent. Other than that, we’ve been on an uptrend and it’s going to be a place to buy," Schatz said.

He believes the correction will be healthy for the markets and relatively small, compared to the 50 percent rally since March.

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In the meantime, Rubino is worried about consumers refusing to open their wallets to spend.

“Consumer spending has no chance of coming back with unemployment soaring and the housing market continuing to deleverage on a nationwide basis," he said. "I don’t see how consumers are comfortable spending when they’re worried about their assets being depleted.”

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