Autumn officially starts on August 22 and, after a long bull run this year, stocks have been swooning lately. Wall Street is turning bearish.

I’m reminded of a statement made by the great American writer Mark Twain, who was bankrupt by the age of 59 because of poor investment decisions. The author of such classics as The Adventures of Huckleberry Finn once said:

“October: This is one of the particularly dangerous months to invest in stocks. Other dangerous months are July, January, September, April, November, May, March, June, December, August and February.”

Of course, I don’t share Mr. Twain’s blanket cynicism about stock market investing, but it’s true that in today’s volatile and uncertain investment climate, you must be particularly prudent. And historically, September-October are indeed dangerous months to invest in stocks.

Read This Story: Buckle-Up for a Roller-Coaster Autumn

Stocks pulled back last week, as COVID Delta continued to loom like a dark cloud over markets and the Federal Reserve gets ready for another policy-making meeting:

In pre-market futures contracts Monday, the main U.S, indices were extending their losing streak and trading deeply in the red. Does the market’s recent drop signal just a brief pause or a new long-term direction? One positive sign is the recent cooling of inflation, a trend that could help shore up stocks.

Examining previous economic cycles since 1990, as inflation rates peaked during the recovery, the following year witnessed robust stock market gains along with only modest moves in interest rates.

Last week’s U.S. consumer price index report for the month of August showed that inflation is moderating, giving the Federal Reserve elbow room to withdraw monetary stimulus at only a slow and incremental pace, beginning with reduced bond purchases.

The Fed’s Federal Market Open Committee meets September 21-22 and investors are waiting with bated breath for the central bank’s next announcement. Fed Chair Jerome Powell has signaled that “tapering” is on the way, but subsiding inflation rates should take some pressure off the Fed.

The economy seems to be withstanding COVID Delta, and it’s my contention that labor shortages and supply bottlenecks will start to get resolved as the year wears on.

Turbulence ahead…

The remainder of 2021 probably will give us greater stock market volatility than we’ve seen to date this year. Historically, market corrections (defined as a stock market decline of 10% or more) happen about every two years. We’re about a year and a half removed from the bear-market bottom of the coronavirus-induced crash and we haven’t suffered even a 5% drop in about 10 months.

With valuations high and risks mounting, we could be due for a correction this year…but not necessarily. There have been 13 years since 1991 in which the market did not undergo a 10% correction.

How should you navigate this rough patch? Just remember that corrections are a normal part of investing. We’ve enjoyed a remarkable bull run. If stocks take a tumble in the waning days of 2021, they’ll inevitably bounce back. Also keep in mind, the S&P 500 has risen nearly 20% so far this year, so a correction wouldn’t be the end of the world.

If we see a correction this year, it’s likely to be a mega-cap affair, with highly valued story stocks (e.g., Big Tech) leading the way down. More than half of S&P 500 stocks already are down by more than 10% from their recent highs.

Stick to high quality company stocks of firms with clear leadership in their sectors, high margins of profitability, and modest amounts of debt on their balance sheet, and which are truly investing in their businesses.

Those are the kinds of companies my colleague Jim Pearce has a knack for finding and leveraging for profits. Jim is the chief investment strategist of our flagship publication, Personal Finance. Keep an eye out for the launch of Jim’s new premium advisory, called Personal Finance Pro. Want to take investing to a whole new level? Watch this space for details.

John Persinos is the editorial director of Investing Daily. Send your questions or comments to mailbag@investingdaily.com. To subscribe to John’s video channel, click here.