The end of quantitative easing could actually send the stock market higher into 2014, Jim Paulsen of Wells Capital Management said Thursday.
"We're debunking a myth in the next six months that this is nothing but a sugar high from the Fed, and once they pull out, the economy and the stock market is going fall apart," he said. "If we don't, then I think we're going to build confidence again by the end of the year to have another nice run-up into 2014."
On CNBC's "Fast Money," Paulsen said that his top sectors were industrials, materials, technology and financials – plays that would benefit from a "rebirth of confidence in this country about the future."
Paulsen also downplayed the Federal Reserve's effect on economic factors.
"I think people have been giving far too much credit to the Federal Reserve's QE program for driving things," he said.
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Paulsen added that the "same confidence which is running through all these markets, I think is going to continue to drive more cyclical stocks and take you away from bond-like stocks and defensive stocks.
"And I think that's going to happen if, indeed, the Fed has to pull away because that means the economy's doing better than people thought."
Paulsen, with $342 billion in assets under management, had a 1,700 year-end target on the S&P 500.
The broader stock market, he added, would likely be range-bound around 1,600 to 1,700.
"I think we're going to have strong enough growth to not allow the stock market to fall very much, but we're also going to have to digest several things, including the big run-up we've already had, a rise in bond yields, which I don't think is over this year," he said.
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"I think the 10-year is going to end around 3 percent, maybe four years out. Also, the winding down of QE, which I think is going to start happening."
Trader disclosure: On July 11, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long AAPL; Josh Brown is long NOK; Josh Brown is long KBE; Stephanie Link is long AAPL; Stephanie Link is long GS; Stephanie Link is long JPM; Stephanie Link is long WFC; Stephanie Link is long CSCO; Stephanie Link is long COST; Stephanie Link is long FB; Stephanie Link is long VALE; Stephanie Link is long KEY; Stephanie Link is long YUM; Stephanie Link is long JOY; Mike Murphy is long BAC; Mike Murphy is long C; Mike Murphy is long FB; Mike Murphy is long LEN; Mike Murphy is long TOL; Steve Weiss is long BAC; Steve Weiss is long C; Steve Weiss is long M.