Why a Market Correction Could Be Good News for Investors
After a strong third quarter and a better-than-expected September, investors are asking, “How much longer can this last?”
In his latest market update, Mark Sorensen, CEO and Chief Investment Officer of Royal Fund Management, explains why he believes the current bull run still has room to grow.
While talk of bubbles and overvaluation fills the air, Sorensen shares data and historical insight that paint a more optimistic picture for the months ahead. Make sure to check out the detailed video below.
Looking Back and Forward
Of the last 10 bull markets, 7 lasted longer than 3 years, and several stretched as long as 5 to 8 years, especially when there’s real economic growth behind them.
According to Sorensen, “We’re far from the euphoric conditions that usually mark the end of a bull market.”
Today’s market, driven in large part by artificial intelligence, looks much healthier than the dot-com era of 1999–2000.
Back then, many companies were valued on the hype of page clicks, not profits.
Today’s tech leaders are different: They are spending real cash flow, not debt, on AI infrastructure, with more than $2.5 trillion already invested.
The Fed Is Still a Friend to the Market
Interest rates are easing, and Sorensen says that’s a tailwind for investors.
“The Fed is still on a downward trend,” he notes, “and historically, one year after a rate cut, the market averages an 11% gain.”
He also points to the Fed’s likely move to stop letting its balance sheet run off – a technical change that could add liquidity to markets and support continued growth.
Volatility Now, Strength Later
After a strong third quarter, some volatility in October is normal, and even healthy.
Sorensen points out that a 5–10% correction “would not be unusual” and could help “build a better foundation for the next move up.”
Recent trading supports that idea.
Despite sharp selloffs, buyers have stepped in quickly.
“We’re still seeing dips being bought,” he explains, “and that’s a sign of underlying strength.”
Earnings and Market Breadth Offer More Good News
Another encouraging sign: The market is starting to broaden out.
Small-cap indexes like the Russell 2000, along with sectors such as financials, industrials, and even healthcare, are beginning to outperform.
And with strong corporate earnings, especially from banks and technology firms, Sorensen believes earnings are likely to save the day, even if short-term volatility continues.
Watch the Full Market Commentary
Check out the video as Mark Sorensen, our Chief Investment Officer, breaks down why he believes the bull market still has legs – including insights on AI, interest rates, and where he expects markets to finish the year.
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