Charles Schwab’s Liz Ann Sonders expected a pause in the bull market this summer, and we got one. But over the longer term, she remains very optimistic on the U.S. 

“Medium to longer term, I’m still quite optimistic,” Sonders tells The Huffington Post. “Valuation is still quite reasonable. Probably the biggest reason for my optimism is that we have not made a dent at all in the long-term Wall of Worry. There is really no cohort yet, whether it is individual investors, or hedge funds, or traditional pension funds, or endowment foundations, that has fallen in love with equities again. There is still a tremendous amount of skepticism and pain from the financial crisis and a view that we are still in a secular bear market. I don’t think we’ve gotten anywhere near the kind of enthusiasm that tends to accompany latter stages of a bull market. So, near term caution, but still quite optimistic about the longer term.”

Sonders says we haven’t yet seen a “great rotation” from bonds has to stocks. While interest in equities has risen and bond outflows are at record levels, she says much of the money leaving bonds is going into cash.

One area Sonders isn’t high on: emerging markets. “The problems in China, India and Brazil are secular, and not just a short-term cyclical problem,” she says. “When people look at underperformance, particularly the carnage this year in those areas, they think it’s a short-term problem because look at the growth rates. There is still this muscle memory thing that emerging markets are where all of the growth and opportunity are. But we think the shift, which has actually been underway for several years now, where the U.S. has been outperforming, is not just a short-term phenomenon, but is more long lasting. And outside of the U.S., the better opportunities are in the developed part of the world, maybe Europe, and to a lesser degree, Japan.”

Sonders also discusses why the U.S. private sector is faring better than many think — and why investors are missing the boat on the U.S. “The U.S. is the best relative play right now from a global/macro perspective,” she says. “The mistake that investors make is that they don’t understand the power of rate of change, of inflection points. The market tends to launch from that turn. But, by definition, at the inflection point, on the downside when you turn back up, the numbers are horrible. You are at the low point. Yet that’s where the greatest opportunities come for investors. I also think that what started back in March of 2009 for the U.S. market was not just a cyclical bull in an ongoing bear market. I think that what started in March of 2009 was the beginning of the next secular bull market that we are in the middle of right now.”