The race to Dow 20,000 is stalling on the first trading day of the new year, but this does not mean the bull market is over. Two market veterans tell CNBC's "Power Lunch" on Tuesday, the key is to stay invested because the market is headed higher.
Rob Lutts, chief investment officer at Cabot Wealth Management, sees an 11 percent upside for the S&P 500. "We believe S&P 500 could reach 2,500 in 2017 as P/E expands to 20 times earnings and earning expand toward $125 per share for 2018."
Lutts says the bull market is not young, but we're only "maybe in the 7th inning today."
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He is currently overweight financials, industrial mining and metals, health care, European financials and productivity enhancers – software companies like Ultimate Software, Salesforce.com and NVIDIA.
Burns McKinney, portfolio manager at NFJ Investment Group, is not as bullish as Lutts, but still sees market returns of 6-8 percent this year. "Not great, but much better than you can get in the fixed income markets," McKinney said.
One of McKinney's favorite sectors is financials and a top pick there is US Bancorp. "Recent boosts to GDP forecasts should favor cyclical industries are more reliant on growth, and many of these very same sectors, which had been lagging in recent years, should also be boosted by deregulation, such as Financial Services," McKinney said.
Ultimate Software and Salesforce.com are higher during trading, while NVIDIA and US Bancorp are lower.
