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In the ever-evolving world of finance, the ongoing stock market correction has sparked a lively debate among investors. This article aims to shed light on the factors influencing differing views on buying or selling stocks, the concept of time fractals, and the current state of the bull market.
History suggests that increasing equity allocation during a correction might not lead to regret. Stephan Albrech, the CEO of Albrech & Cie. Asset Management from Cologne, highlights the importance of staying invested, even during market downturns. However, it would be reckless to sell stocks impulsively due to the correction.
The key factors influencing these differing views center on a combination of macroeconomic fundamentals, investor sentiment, geopolitical events, and market psychology. These include tariff policies, jobs data, inflation expectations, Federal Reserve interest rate actions, geopolitical tensions, corporate earnings, and currency movements. Market participants weigh these inputs differently, leading to varied perspectives on whether to buy or sell stocks at given times.
For instance, the July 2025 selloff was triggered by negative catalysts such as Trump-era tariffs, weak employment data, and geopolitical tensions, which induced fear and selling pressure among investors. However, improving investor sentiment driven by expectations of Fed rate cuts, tariff pauses, strong earnings, and easing inflation later fueled a rebound and cautious optimism in markets.
Regarding the role of "time fractals," this concept generally refers to patterns in financial markets that repeat across multiple timeframes—such as minutes, days, weeks, or months—reflecting self-similarity in price movements. Time fractals help explain why investors can interpret market data differently depending on the timeframe they focus on. For instance, short-term traders might react to intraday sentiment shifts and volatility, while long-term investors concentrate on macroeconomic trends and corporate fundamentals. This fractal structure contributes to the coexistence of varying buy and sell perspectives because the market behaves differently over different temporal scales.
The globally leading US stock index, the S&P 500, experienced a long bull market, Phase 1, from 2009 to 2018, divided into three larger uptrends interrupted by two small corrections. We are currently in the middle or not far from the end of the sub-phase 1 of the long-term Phase 3 of the bull market since 2009, indicating that there are likely still a few weeks of nice gains ahead. Despite the correction, Phase 3 is predicted to be the strongest phase within the overall Phase 3. It might be wiser, depending on risk profile, to increase equity allocation to benefit from the expected strong Phase 3.
Pension funds and insurers think long-term when selecting and timing purchases, buying or selling large volumes without distorting prices. Asset managers focus on medium to long-term and may pay attention to newer trends. This correction could last two to three months, after which the S&P 500 is expected to soar, easily surpassing its previous highs and confirming the 2018 highs as support, indicating a very strong and stable uptrend.
In conclusion, the interplay of broad economic indicators, political and policy developments, psychological sentiment, and the fractal nature of market timeframes results in diverse views on financial markets and stock trading decisions. Understanding time fractals aids in recognizing that market patterns and investor behavior recur similarly over multiple time horizons, shaping the dynamic debate over when to buy or sell stocks.
Other investors might find the current stock-market correction an opportunity for investing, given the predicted strength of Phase 3 of the ongoing bull market. Despite the volatile short-term sentiment, the long-term focus of pension funds and insurers might lead them to buy stocks during this correction, given their expectation of strong gains ahead.
