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Stock investors should capitalize on the recent market correction by broadening portfolios beyond just tech, says one top Wall Street strategist

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  • Tech stocks’ time in the spotlight is over, and investors should begin shifts to value stocks and cyclical sectors, James Paulsen, chief investment strategist at The Leuthold Group, said in a recent note.
  • The S&P 500’s brief Thursday correction marks “an opportunity to ‘broaden your bets’” before valuations rebound, Paulsen said.
  • Money supply growth surged in recent months on the back of Federal Reserve easing and the CARES Act. That trend has preceded economic expansions by 12 months in all eight recessions since 1960, according to the strategist.
  • The cyclical sectors that avoided bankruptcy during coronavirus lockdowns “may currently be positioned with the greatest upside profit leverage,” Paulsen said.
  • Still, investors should hold on to some growth positions as their fundamentals remain healthy, he added.
  • Visit the Business Insider homepage for more stories.

The S&P 500’s brief correction opened the door for a shift to neglected corners of the market, James Paulsen, chief investment strategist at The Leuthold Group, said in a recent note.

The benchmark index fell enough Thursday morning to temporarily sit 10% lower from its early September record.

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