Why a Major Market Correction Deserves Serious Consideration
By Roger V. Coleman | CEO- Coleman Group Partners, LLC
November 2026
After nearly 4 decades on Wall Street, and as a recently inducted member of the Barron’s Hall of Fame, I remain confident in the ability of strong businesses to innovate and create lasting value. My outlook has been broadly bullish for decades. That conviction remains, but today’s risks warrant preparation for a potentially significant market correction. I am not predicting an imminent decline. My concern is the combination of geopolitical instability, rising government debt, uneven consumer financial health, demanding valuations, concentrated market leadership, and leverage. These vulnerabilities could reinforce one another, pressuring corporate earnings, raising financing costs, and weakening investor confidence. An energy disruption, for example, could increase business and household expenses while limiting the Federal Reserve’s ability to reduce interest rates. Heavy government debt could constrain the policy response, while financially stretched consumers could reduce spending.
High valuations leave markets more sensitive to disappointment. As a simple illustration, a stock trading at 25 times expected earnings would decline 20% if its valuation fell to 20 times earnings. If expected earnings also dropped 10%, the combined decline would be 28%. A substantial market correction does not require an equally severe economic contraction. Concentration adds exposure. Investors holding several funds may still own many of the same companies, particularly technology and artificial intelligence leaders. Leverage and forced selling could amplify a downturn. There are meaningful reasons for optimism, including resilient banks, broadly strong household balance sheets, technological progress, and the potential for continued earnings growth. Markets could keep rising, and my assessment could prove too cautious.
For Coleman Group Partners, the priority is reviewing liquidity, overlapping exposures, and the ability to withstand a prolonged decline. Appropriate hedging may reduce certain risks, but costs, expiration dates, potential limits on upside, and tax consequences require careful evaluation.
Preparation is not prediction. My objective is to preserve flexibility, participate in long-term opportunity, and reduce the risk of being forced to sell during a difficult market.
Disclaimer: These opinions are as of October 2026 and are for general information only, not investment, legal, or tax advice, or an offer or recommendation concerning any security. Views may change or prove incorrect. Investing involves possible loss of principal. Diversification and hedging do not guarantee protection. Consult qualified professionals regarding your circumstances.