Both the S&P 500 and Dow Jones Industrial Average hit record highs this week, and the party isn't over, says James Paulsen, chief investment strategist for Wells Capital Management.
The market has erased much of its imbalance in recent weeks, with a shift out of momentum growth stocks into value stocks, he tells
CNBC. That puts the five-year stock rally in a position to continue, Paulsen maintains.
"What we're doing is refreshing this bull market in the last several months," Paulsen notes. "We've corrected any excess valuation. We've corrected any excess sentiment. . . . We're setting up for another run."
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Investors should jump aboard the gravy train. "You don't want to be out because it just seems like there's momentum, and you want to be in this thing," he insists.
The Dow Jones industrial average rose 19.97 points, or 0.12 percent, to end Tuesday at 16,715.44, its third straight record closing high. The Dow also set an intraday record at 16,735.51, the Associated Press reported.
The S&P 500 gained just 0.8 of a point, or 0.04 percent, to 1,897.45, its second straight record closing high. The S&P 500 also advanced during the session to 1,902.17, a lifetime intraday high.
The Nasdaq Composite dropped 13.69 points, or 0.33 percent, to 4,130.165.
Stocks have successfully overcome 0.1 percent GDP growth and weak earnings reports in the first quarter, the Federal Reserve's tapering of its bond purchases and turmoil in the Ukraine, Paulsen explains.
"We've had bad first quarter growth," he states. "We've had weather-distorted and bad economic and earnings reports. We've had geopolitical unrest in Ukraine. We've had to deal with tapering and yet the market is going to new highs."
Other experts are enthusiastic about stocks too.
"The global economy is accelerating, central banks are dovish, companies are making acquisitions and it's hard to see what could keep the market down from here," Allan von Mehren, chief analyst at Danske Bank in Copenhagen, tells
Bloomberg.
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