The stock market’s struggles and some weakness in recent economic data have scared some investors out of stocks. Top strategist Charlie Dreifus of Royce & Associates isn’t one of them.

“While having retreated, the market remains elevated,” Dreifus writes in commentary available on Morningstar’s site. “However, we remain bullish as we still feel our positive outlook thesis is still relevant. We think that consumer strength is likely to continue as a result of pent-up demand, demographic trends, employment growth, healthier balance sheets, and lower inflation.”

One interesting economic note Dreifus makes involves inventories. “Inventory rebuilding in the fourth quarter continued, surprising most forecasters,” he says. “We had previously pointed out that this was possible, stemming from historically low inventory-to-sales ratios. In fact the broadest ratio, ‘non-farm inventories to final sales of good and structures’ in constant dollars, set a 40-year low in the fourth quarter.”

Dreifus says that, while many are concerned that high profit margins will mean revert, he thinks they may well head even higher. He thinks margins have been high thanks in part to constrained labor costs and technological advances, and thinks we’ll see “lower break-even points and thus higher operating margins — indeed much higher margins — once revenues advance more quickly.”

All in all Dreifus is quite positive on the U.S. “The U.S. is an oasis in a global sea of problems, essentially independent of other nations,” he says. “In addition, we have a growing population, a more laissez-faire economic system, rule of law, plentiful inexpensive energy — indeed, an energy renaissance — a manufacturing renaissance, and within a few years, we believe, balanced budgets—both trade and fiscal.”