CNBC Stock Blog

Expect a 10% Market Correction by October: Strategist


September will be a rocky month for investors, but here's how you can protect your portfolio, Tommy Williams, president of Williams Financial Advisors and Jim Lacamp, portfolio manager and advisor at Macroportfolio Advisors told CNBC.

“China has been a leading indicator for the global financial markets and we’re seeing real correction in the Chinese markets,” Lacamp told CNBC. “And in the meantime, in the U.S. market, we’ve had a 50 percent move without much of a correction. Historically, September’s been a tough month … so I think the stage is set for a correction.”

Time to Reassess Risk?

Lacamp said he expects a 10 percent correction between now and the middle of October before one more leg upward in the markets.

“And then you’ll start to see a double dip because expectations are high,” he said.

Lacamp said investors need to be careful about buying stocks and need to be protective of ones that have already been bought.

“I don’t think it would hurt to have a larger percentage of cash and corporate bonds are a good place to be in right now,” he said. “When you have a deflationary environment, corporate bonds can provide very good real returns, so investors don’t have to be overly aggressive in this environment.”

In the meantime, Williams said investors should look to buy on the pullbacks before the market rises again.

“There could be a pullback and some buying opportunities … I think the market pulls back but it goes strongly towards the end of this year,” said Williams.

Williams Likes:

S&P Technology

S&P Consumer Discretionary

Williams Dislikes:

S&P Financial

S&P Utilities

Lacamp Likes:

S&P Technology

MSCI Emerging Markets

Lacamp Dislikes:

KBW Bank Index

S&P Utilities

S&P Consumer Discretionary



No immediate information was available for Lecamp or Williams.

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