Bob Doll, chief equity strategist at Nuveen Asset Management, remains bullish on stocks, but he expects increased volatility, as evidenced by the market's turmoil in September-October.
"I think the trend is up, but it's going to be a bumpier ride than the last several years, where with 20/20 hindsight it was pretty easy," he told CNBC
The CBOE Volatility Index (VIX), which measures expected volatility for the S&P 500 index, hit a seven-year low in June. It soared 170 percent from Sept. 19, when the S&P 500 hit a record high, to Oct. 15, when the S&P 500 reached its low. Since then, the VIX has fallen back 47 percent.
Volatility should increase as the Federal Reserve withdraws its stimulus, Doll said. "I think the Fed had a lot to do with the volatility. When there's ample and excess liquidity, it does dampen volatility, and obviously the path of least resistance was to the upside." Economists expect the Fed to begin raising interest rates around mid-2015.
"I think if the Fed withdrawal liquidity, or provides less of it is the more accurate way to put it, that means volatility is going to start moving up a bit. Not to high levels, but just to above what we gotten used to in the last few years, and to more normal environments."
Higher rates could support stocks if they reflect increased global economic growth, Doll said.
Both the S&P 500 and the Dow Jones Industrial Average reached all-time peaks this week. "We've gotten good news on all of the worries since mid-October, and we had much-better-than-expected earnings," Kate Warne, an investment strategist at Edward Jones, told The Associated Press
"As a result, it's not surprising we're seeing a series of record highs."
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