The volatile market actually provides opportunities for stock pickers to find and buy well-run companies for the long term rather than just chasing the indexes, two money managers told CNBC on Wednesday.
"We're kids in a candy store," said Greg Hahn, chief investment officer at Winthrop Capital Management. "The market is repricing risk. We're more active in identifying securities that are undervalued."
Even with signs that housing may be slowing, Hahn said he likes real estate and the energy sector.
Sitting next to Hahn on "Squawk Box," Susan Schmidt, head of U.S. equities at Aviva Investors, said she mostly feels the same way about the market. "I may be a kid in the candy store, but I'm very selective."
The stock market has not necessarily peaked, she said. "But that's what people are nervous about. They're waiting for that cliff. And so they keep looking over their shoulder."
Schmidt sees opportunities in retailers that are pumping lots of money into their online operations.
Schmidt and Hahn said they recognize the challenges of a market that's getting used to higher interest rates and economic growth that appears to be headed for a slowdown from the robust of levels of 2018.
Hahn sees the Federal Reserve winding down its interest rate cycle. "We think December is in the bag; they will raise. And there's one more. It'll be early" next year. In the second quarter of 2019, the Fed will start talking about pausing and taking cues from the economic data, he predicted.
The Fed would probably like to get rates to 4 percent, but it will be lucky to get them to 3 percent, Hahn said.
The Fed's current target range for its benchmark fed funds rate, what banks charge each other for overnight loans, stands at 2 to 2.25 percent.
Central bankers hold their final monetary policy meeting of the year next week. They're expected to increase rates for the fourth time in 2018. After its latest hike in September, the Fed had forecast three moves in 2019. But with signs of pockets of weakness in the economy and recent turmoil on Wall Street, the market puts low odds on any hikes next year.