Have you looked at the correction in the market as an opportunity? Have you been executing your well-thoughtout plan to put sidelined cash to work in the equity market? Sometimes quick drops in the market cause nervous investors to run for cover rather than see the potential opportunity.

In the last piece, we commented on the S&P 500’s (SPX) break down and close below the much-watched 200-day moving average. Since that close, virtually every trading day, including Monday of last week, it’s been a battle between traders who are seeking short-term profits as the market gyrates and investors who are taking advantage of downside selloffs to step in and buy equities with a view that reaches out well into the future.

On a number of these recent days, a pattern emerged. Short-term traders made bets that the stock market was going to go down, but buyers stepped in and stabilized the market, eventually causing it to rise. This resulted in a number of “short squeezes” where positions that would profit from a further equity drop had to be “covered” or exited to prevent further losses.

Understand that a meaningful portion of each trading day’s volume is made up of hedge funds and other speculators looking for a quick profit. While these speculators often get a bad rap, they do provide liquidity to the market and are part of the “oil” that helps the system function fluidly, most of the time.

While traders have their place, we cater to investors who are attempting to build wealth over time. Given that, a key piece of the puzzle on market pullbacks depends on your forward outlook. Ours remains positive. As we look out over the balance of this year, we see good economic growth, decelerating inflation, an improving labor market, and robust corporate earnings growth. That means we want to step in and be buyers when the stock market corrects.

With that outlook, we continue to recommend both the Information Technology and Communication Services sectors for the quality and growth components of portfolios. Note that both of these sectors have underperformed the SPX over the course of the last six weeks. Take advantage of this relative underperformance.

In addition, we recommend that investors look toward two other favorable cyclical sectors, Financials and Industrials, as places to boost exposure. In terms of fixed income, we suggest sticking to an intermediate-term horizon. We favor municipal bonds and preferreds. In fixed income, we believe the idea is to stay defensive but to stay invested.

In the current environment, expect more days where trader-induced volatility is met with buying coming from longer-term investors looking to take advantage of opportunities. We recommend being a buyer.