"You want to look at companies that are going to grow, not just top line but also the bottom line, now. And forget about all this cost-cutting," he said. He added that it was a good time to reduce positions in stocks "that have been fixed-income substitutions—these 4 percent, 5 percent dividend-yielders that are not growing their payout ratios but are trading at 17, 18 earnings. And you find them in the staples, and you'll find them some of the other select telecom.
"You want to move to technology growth stocks, consumer cyclical, discretionary and some of the industrials, as well."
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Sethi said such names as Ford, General Motors and Delphi held potential.
Also, while Amazon.com garners so much attention, eBay provided a better play, he added.
"EBay's got a great balance sheet," he said. "They're growing top line 10 percent. They're trading at 15 times earnings. They've got PayPal within them that is worth a lot more than people are giving credit for. And I think if you get eBay turned around and get investor sentiment turned around, you could get some multiple expansion along with earnings growth."
Sethi was also bullish on VeriFone, "a totally broken stock," saying it's the leader in a growing sector.
"If you go into any taxi, you'll see you're using their systems," he said. "And we think with a new CEO and management team, this is a company that's trading at 12 times earnings that should be more in the 15 to 20 times."
Sethi also said that a reduction in the Federal Reserve's $85-billion-per-month bond-buying program wouldn't necessarily have a linear effect on markets.
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"If one of these numbers comes on the other side, you could get a big jump in the 10-year, and then you'll get a market selloff, whether it's in the financials or it's something else. But I think sitting here in a couple of years, we think the market's definitely higher," he said. "But you've got to be in the right sectors."
Sethi's top holdings include Delta Air Lines, United, Qualcomm, General Electric, General Motors, Ford, Visa, BorgWarner, Alumina and Harmon. He also held positions in eBay, Verifone and Delphi. Year to date, his core fund was up 32.58 percent, net of fees.
— By CNBC's Bruno J. Navarro. Follow him on Twitter