Liz Ann Sonders, Charles Schwab’s chief investment strategist, says the recent market pullback was needed to push back excessive optimism that had developed, and moving forward her firm is high on healthcare stocks.

According to BusinessWeek, Sonders says that enormous sensitivity among investors doesn’t have to be a negative. “I don’t view that as necessarily bad,” she says. “If we were in an environment where you couldn’t do anything to pull back the optimism, that would be more troubling.”

Schwab recently raised its rating on healthcare stocks to outperform (from market perform), in part because of the results of the Massachusetts Senatorial election, believed to have dealt healthcare reform a devastating blow, Sonders says. It also downgraded its tech sector rating to perform (from outperform), as expectations for the sector’s earnings rose too high. Schwab is neutral on all other sectors aside from consumer discretionary, which it rates underperform, BusinessWeek reports.

Sonders says the money that has poured into debt markets over the past year could be a source of cash that will drive stocks higher. She says money in Treasury bonds in particular could move into equities if yields start rising.