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Beware—10-12% Pullback Possible This Month: Pro

Stocks slipped after a report showed a decline in factory orders and only a slight rise in pending home sales. Mike Rubino, president of Rubino Financial, and Larry Rosenthal, president of Financial Planning Services, shared their market outlooks.

“This recovery, in terms of real final sales, is the weakest one ever. And in regards to housing, employment, organic income, there hasn’t been any recovery at all,” Rubino told CNBC.

He said he wouldn’t be surprised to see a 10 to 12 percent pullback in October.

“If you’re a pre-retiree or a retiree and you’re concerned about the return of your money, high-grade corporate and government bonds is where we’re suggesting you’d be right now,” Rubino suggested.

In the meantime, Rosenthal said he is bullish on the markets long-term and said it’s a good time for investors to be "well-diversified" across different sectors.

“We favor stocks that are going to be a good hedge against inflation long-term, which will produce some good growth as well as favorable margins versus their industry,” he said.

“We’ve got a very interesting time coming up with the election happening, the Fed talking about more quantitative easing, the jobs number out Friday as well as earnings season coming up.” (Jobs Number Preview: Gloomy)

Investor Recommendations:

Rubino Likes:

For conservative investors: iShares Barclays 1-3 Year Treasury Bond Fund

For moderate investors: iShares Barclays 20+ Year Treasurys Bond

For Aggressive investors: ProShares Short S&P 500

Rosenthal Likes:

Commodities

Dividend Playing Stocks

Emerging Markets

Technology

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Scorecard—What They Said:

  • Rosenthal's Previous Appearance on CNBC (Aug. 2, 2010)
  • Rubino's Previous Appearance on CNBC (Sept. 8, 2010)

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Market Views—Across the Board:

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CNBC Data Pages:

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CNBC Slideshows:

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Monday's Dow Laggards (as of this writing):

Microsoft

Intel

Alcoa

General Electric*

Caterpillar

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Disclosures:

No immediate information was available for Rosenthal or Rubino.

*GE is the parent company of CNBC and CNBC.com.

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Disclaimer