U.S. stocks have just logged their worst October start since 2008, as investors worry that a global economic slowdown will turn into a recession. The benchmark S&P 500 (^GSPC) shed 1.99% in the first two days of the month, before staging a mild bounce-back in midday trading Thursday.

For Paul Schatz, president and chief investment officer of Heritage Capital, this doesn’t signal Armageddon ahead. In fact, he thinks we could see the Dow break records and hit 30,000 by early 2020.

“Every time the bears get the tiniest morsel of meat in their mouth they start crowing like, ‘this is it, the big one, it’s ‘08 again, buy your water and canned goods.’ No, this is not the beginning of a bear market.”

Market fundamentals are currently too strong, Schatz said, for stocks to tumble 20% from their recent highs, which is the technical definition of a bear market.

“We’re only 4%-5% off our all-time highs, which has happened a number of times during this bull market, especially these past few years,” Schatz said. “The credit markets are strong, the NYSE advance/decline line just made all-time highs and semiconductors have recently awoken from their slumber.”

Schatz characterized the recent selloff as a healthy and routine pullback. “It is October, which people view as being scary, but it’s a month where bottoms are hammered in,” he said.

If history is any guide, that’s true.

“Some of the worst starts to October have been followed by huge gains for the remainder of the month and year,” Bespoke Investment Group wrote in a note.

“There have now been 14 [instances of the S&P falling by more than 1% on the first trading day of October ] since 1928. ... [T]he S&P has gained an average of 3.75% for the rest of October when it has started the month with a 1%+ decline. For the rest of the year, the S&P has been up 12 of 13 times after a 1% decline on the first trading day of October for an average gain of 7.22%,” according to Bespoke.

Analysts at JP Morgan wrote, “Despite average intra-year drops of 13.9%, annual returns [were] positive in 29 of 39 years.”

Still, long-time stock trader Stephen Guilfoyle said there’s more selling to come before we find a bottom.

“The time to get back in is probably not quite upon us,” he said. “There needs to be more definition in Washington, in trade, in the macro. That said, for me, the time to sell aggressively has also passed.”

Schatz predicted that the Dow Jones Industrial Average (^DJI) could dip below 25,500 in the coming weeks, before rallying back.

“Then, I think we have a straight shot to Dow 28,000. Actually, Dow 30,000 is a strong possibility in the first quarter,” he said.

Schatz encouraged investors to start making their stock shopping lists now to take advantage of lower equity prices in early 2020. He likes defensive plays including Raytheon (RTN), which was recently upgraded to “overweight” from “neutral” at JP Morgan.

“The bears shouldn’t start celebrating yet,” said Schatz. “They’ve been proven wrong for 10 years, they’ll be proven wrong for at least the rest of this year.”

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