Corrections Will Become 'Common' Once QE2 Removed

June is typically a rough month for stocks and so we’re beginning to see more of the defensive sectors outperform, said Mark Tepper, managing partner and co-founder of Strategic Wealth Partners.

“We’re definitely positioned much more defensively than 2 to 3 months ago,” Tepper told CNBC.

“With QE2 [Fed quantitative easing] wrapping up, we feel the markets have been spoiled since Jackson Holein that the corrections have been extremely shallow.”

Tepper expects that once the Fed’s support is eventually removed, volatility is going to increase throughout the summer and corrections in the 10 to 15 percent are going to become “much more common.”

Tepper’s Picks:

iShares DJ US Energy

iShares DJ US Hlth

iShares DJ Div

Scorecard—What He Said:

  • Tepper's Previous Appearance on CNBC (May 9, 2011)

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Tepper, his family and firm own shares of IYH and DVY.