While the market may well hit some road bumps this year, top strategist Liz Ann Sonders of Charles Schwab says it’s no time to ditch stocks.
“There is a slightly elevated risk of a 10% correction this year, but I don’t think the secular bull market is over,” Sonders said at the recent Inside ETFs conference, Investment News reports. “I have some short-term concerns, but I personally think the bull market we’re in now will be the best is our lifetime.”
Valuations may be around historic median levels based on forward earnings, but Sonders says that’s not cause for concern. “Bull markets rarely stop at the median P/E,” she said, noting that the average trailing P/E of every bull market since the 1950s is 18.7; currently it is 16.6.
Sonders points to extremely high levels of corporate cash, which she thinks companies will finally start to use to make capital expenditures this year, as one reason for her bullishness. Another: the strong state of US manufacturing.