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10% Correction ‘Not the End of the World’: Strategist

Markets have been on an upward trend despite investors’ worries about a September slump. However, some skeptics continue to wonder how much further stocks can rise. David Fleisher, COO of Firstrust Financial Resources, and Maury Fertig, CIO of Relative Value Partners, shared their market insights.

“We shouldn’t fixate on where we were at the same time, and the fear of what was 6,500 in the Dow should not be a motivating factor,” Fleisher told CNBC.

“A 10 percent decline would not be a reason to lose your lunch over the side of the boat.”

Fleisher said a correction would be a good opportunity for investors to get back into the market or to rebalance their portfolios.

“The positive sentiment seems to be winning out, but at the same time, a reasonable correction would not be the end of the world,” he said.

Fleisher said he holds a slightly higher position in TIPS and in commodities to hedge himself against a possible inflation in the coming months.

In the meantime, Fertig said he is concerned about the skepticism in the market and negative sentiments.

“The retail equity has not bought into this rally,” he said. “We’re going up because there’s some money chasing it, but it’s very much a narrow rally as far as overall retail investors.”

Fertig said deflation is still the main concern and will be for the next nine to 12 months. He added that inflation won’t be a concern until 2011.

“We’ve had a market that’s rallied…and so I’m looking for areas that I can catch the upside of the market and have a little downside protection,” Fertig said.

He recommended SunAmerica Alpha Growth.

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Disclosure:

No immediate information was available for Fertig or Fleisher.

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